Managerial Accounting: Ex19-28 On June 30, 2016, the end of the first month of operations, Tudor

Managerial AccountingEX 19-28 Absorption costing income statement
On June 30, 2016, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:
 Sales (420,000 units) 7,450,000 
Variable cost of goods sold:
Variable cost of goods manufactured (500,000 units x $14 per unit) 7,000,000
Less ending inventory (80,000 units x $14 per unit) 1,120,000
Variable cost of goods sold 5,880,000
Variable selling and administrative expenses 80,000 5,960,000 
Contribution margin 1,490,000 
Fixed costs:
Fixed manufacturing costs 160,000
Fixed selling and administrative expenses 75,000 235,000 
Income from operations $1,255,000 
 
A. Prepare an absorption costing income statement.
B. Reconcile the variable costing income from operations of $1,255,000 with the absorption costing income from operations determined in (a).
 
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