Topple Company_Variable costing
accountguru3. (TCO E) Topple Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below:
Units in beginning inventory | 0 |
Units produced | 9,000 |
Units sold | 7,000 |
Sales | $100,000 |
Less cost of goods sold:
Beginning inventory | 0 |
Add cost of goods manufactured | 54,000 |
Goods available for sale | 54,000 |
Less ending inventory | 12,000 |
Cost of goods sold | 42,000 |
Gross margin | 58,000 |
Less selling and admin. expenses | 28,000 |
Net operating income | $30,000 |
Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements. (Points : 30)
12 years ago
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topple_company_variable_costing.docx
