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Variable and Absorption Costing-Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $140. The variable and fixed cost data are as follows: $80.00 Direct labor Overhead Variable cost per unit Fixed cost (annual) Marketing, general and administrative Variable cost (per service contract completed) Administrative expenses (annual fixed cost) During the year, 10,000 service contracts were signed and 9,800 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. a. Calculate reported income for management. Do not use negative signs with any answers. Sales Cost of Goods Sold: Absorption Costing Income Statement $ Beginning Inventory Variable Costs Fixed Cost Less; Ending Inventory Cost of Goods Sold Gross profit Selling expense Administrative expense Net Income Sales Cost of Goods Sold: Beginning Inventory Variable Costs + Less: Ending inventory Variable cost of goods sold $ 0 850,000 100,000 19,000 + $5.00 $100,000 b. Calculate reported income for the bank. Do not use negative signs with any answers. Variable Costing Income Statement $ $6.00 $42,000 $ 1,372,000 0 850,000 17,000 931,000 441,000 58,800 42,000 340,200 $ 1,372,000 68,000 x

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Variable and Lbsorptien Costing service Company in caculate reported acame for the bank: Dg ogtise necative sgon with ary answers

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