60.1K

Verified Solution

Link Copied!

Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825 * $1,075) Cost of goods sold (825 $450) Gross margin Selling and administrative expenses Net income $ 886,875 371,250 515,625 230,000 $ 285,625 Additional Information a. Product cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $230,000 in selling and administrative expense consists of $85,000 that is variable and $145,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) Check my work - RIVOL. USE Per noyon HD , WICHT LUND I JUVIVONO PIVUULUUSI CU CHIUSIU WU MUUUUUII CUSCOLI amount is based on $107.500 of fixed production costs allocated to the 1,075 kayaks produced . The $230,000 in selling and administrative expense consists of $85,000 that is variable and $145,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks The dollar difference in variable conting income and absorption costing income units foxed overhead por unit

Answer & Explanation Solved by verified expert

See Answer