Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. whitman company has just completed its first year

Whitman Company has just completed its first year of operations. The companys absorption costing income...

70.2K

Verified Solution

Question

Accounting

Whitman Company has just completed its first year of operations. The companys absorption costing income statement for the year follows:

Whitman Company Income Statement
Sales (42,000 units $43.10 per unit) $ 1,810,200
Cost of goods sold (42,000 units $24 per unit) 1,008,000
Gross margin 802,200
Selling and administrative expenses 525,000
Net operating income $ 277,200

The companys selling and administrative expenses consist of $315,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows:

Direct materials $ 11
Direct labor 4
Variable manufacturing overhead 4
Fixed manufacturing overhead ($255,000 51,000 units) 5
Absorption costing unit product cost $ 24

Required:

1. Redo the companys income statement in the contribution format using variable costing.

2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Cards: Suppose you draw two cards with replacement. Round your answers to 3 significant digits*. (a) What is...

Statistics
Q

Suppose a translocation occurs between chromosome 14 and chromosome 21 in an individual. A translocation is...

Biology
Q

What types of disorders do women commonly experience? What about men? Do you think these gender...

Psychology
Q

Define: Gate Control Theory of pain perception  

Psychology
Q

Hello i have a case paper due on Bavaria Brewery and this is one of the...

General Management
Q

The energy density in the electric field created by a point charge falls off with...

Physics
Q

Question 4 25 points Which of the following graphs represent the inverse of the function...

Geometry
Q

You may need to use the appropriate appendix table or technology to answer this question...

Statistics
Q

A table of values for f g f and g is given below a If...

Calculus
Q

Burich Co. reported short-term borrowings of $2.80 million, long-term borrowings of $6.83 million, repayments of...

Accounting
Q

Your Company's blanace sheet reported common stock of $80,000 and retained earnings of $45,000 on...

Accounting
Q

One of the stages of the manufacturing process of aluminum components is the heat treatment,...

Accounting