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Sagot :
Answer:
1a Absorption Costing Income Statement for July:
Sales $104,000
Cost of Goods Sold:
Variable ($81,920/6,400*5,200) $66,560
Fixed ($15,360/6,400*5,200) $12,480 $79,040
Gross Profit $24,960
Less: Selling and Administrative Expenses
Variable $10,920
Fixed $5,200 $16,120
Operating Income/(Loss) $8,840
1b. Absorption Costing Income Statement for August
Sales $104,000
Cost of Goods Sold
Variable $66,560
Fixed $18,240 $84,800
Gross Profit $19,200
Less: Selling & Admin Exp.
Variable $10,920
Fixed $5,200 $16,120
Operating Income (Loss) $3,080
2. Variable Costing Income Statement for July and August:
July August
Sale A $104,000 $104,000
Variable Expenses
Manufacturing $66,560 $66,560
Selling and Administrative $10,920 $10,920
Total Variable Expenses B $77,480 $77,480
Contribution Margin A-B $26,520 $26,520
Less: Fixed Costs
Manufacturing $15,360 $15,360
Selling and Administrative $5,200 $5,200
Operating Income $5,960 $5,960
3 Reconciliation Statement for July and August:
July August
Absorption Costing Operating Income $8,840 $3,080
Add: Fixed Manufacturing Cost in $0 $2,880
Beginning Finished Goods Inventory
Less: Fixed Manufacturing Cost in ($2,880) $0
Ending Finished Goods Inventory
Variable Costing Operating Income $5,960 $5,960
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