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Winter Sports, Inc. produces snowboards. The company has no finished goods inventory at the beginning...

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Accounting

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Winter Sports, Inc. produces snowboards. The company has no finished goods inventory at the beginning of year 1. The following information pertains to Winter Sports, Inc.: 100,000 units $200 per unit Annual production Sales price Variable production cost per unit Direct materials Direct labor Manufacturing overhead Fixed production costs $60 30 40 $130 per unit $500,000 each year; $5 per unit at 100,000 units of production $10 per unit Variable selling and administrative cost Fixed selling and administrative cost $800,000 each year 1. All 100,000 units produced during year 1 are sold during year 1. a. Prepare a traditional income statement assuming the company uses absorption costing. b. Prepare a contribution margin income statement assuming the company uses variable costing. 2. Although 100,000 units are produced during year 2, only 80,000 are sold during the year. The remaining 20,000 units are in finished goods inventory at the end of year 2. a. Prepare a traditional income statement assuming the company uses absorption costing. b. Prepare a contribution margin income statement assuming the company uses variable costing

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