Acct344 Cost Accounting: Week 7 Problem 2 Dolly Corporation

Acct344 Cost Accounting
Week 7

Problem 2:
The following is the current variable costing income statement for Dolly Corporation.
Sales (5,000 units) 100,000
Variable expenses
Cost of goods sold 35,000
Selling (10% of sales) 10,000 45,000
Contribution margin 55,000
Fixed expenses
Manufacturing overhead 24,000
Administrative 12,500 36,500
Operating income 18,500

Below is the following information on operations for Dolly Corporation.
Beginning inventory (units) -
Units produced (units) 6,000
Manufacturing costs
Direct labor (per unit) 5.00
Direct materials (per unit) 2.30
Variable overhead (per unit) 2.40

Required:
Prepare an absorption costing income statement.
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