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Topple Company_Variable costing

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Question;3.(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)

 

Paper#37320 | Written in 18-Jul-2015

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