Question

Rey Company's single product sells at a price of $235 per unit. Data for its single product for its first year of operations follow $ 39 per unit 47 per unit Direct materials Direct labor Overhead costs Variable overhead Fixed overhead per year Selling and administrative expenses Variable Fixed Units produced and sold 5 per unit $ 168,eee per year 37 per unit $ 238,eee per year 24, eee units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 < Prev 3 of 5 Next >

Answer 1

REY Company Absorption Costing Income Statement Sales (24000*235) LESS: Cost of Goods Sold Direct Material (24000*39) Direct Labour(24000*47) Variable Overehead cost(24000*5) Fixed Overheads Cost Cost of Goods Sold Gross Margin Less:Fixed Expenses Variable Selling and Administrative Expenses (24000*37) Fixed selling and Administrative Expenses Total fixed Expenses Net operating income (loss) 5640000 936000 1128000 120000 168000 2352000 3288000 888000 238000 1126000 2162000

REY Company Variable Costing Sales (24000*235) Less: Varaible cost Direct Material (24000*39) Direct Labour(24000*47) Variable Overehead cost(24000*5) Variable Selling and Administrative Expenses (24000*37) 5640000 936000 1128000 120000 888000 Total Varaible Cost 3072000 Contribution Margin Less:Fixed Expenses 2568000 Fixed Overheads Cost 168000 Fixed selling and Administrative Expenses Total fixed Expenses Net operating income (loss) 238000 406000 2162000