Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The company produced 44,000 units
Sold 36,000 units for $140 per unit.
Manufacturing costs:
Direct materials per unit $ 60
Direct labor per unit $ 22
Variable overhead per unit $ 8
The fixed overhead for the year $ 528,000
Selling and administrative costs:
Variable selling and administrative cost per unit $ 11
Fixed selling and administrative cost per year $ 105,000
I will assume that the required answer is an income statement using absorption and variable costing:
Absorption costing:
It includes the fixed overhead in the manufactured costs:
Unitary cost= direct material + direct labor + unitary variable overhead + unitary fixed overhead
Unitary cost= 60 + 22 + 8 + (528,000/44,000)= $102
Income statement:
Sales= 36,000*140= 5,040,000
COGS= (36,000*102)= (3,672,000)
Gross profit= 1,368,000
Variable selling and administrative= (11*36,000)= (396,000)
Fixed selling and administrative= (105,000)
Net operating income= 867,000
Variable costing:
Under variable cost, fixed overhead is not included in manufacturing costs.
Unitary cost= direct material + direct labor + variable overhead
Unitay cost= 90
Income statement:
Sales= 5,040,000
Variable cost= (90*36,000)= (3,240,000)
Contribution margin= 1,800,000
Fixed overhead= (528,000)
Variable selling and administrative= (11*36,000)= (396,000)
Fixed selling and administrative= (105,000)
Net operating income= $771,000
