Question

Module 6 Assignment Show Me How Calculator Print Item Thcome Statemente under A rtion and anabe Costing Shawnee Motors Inc assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August Sales (20,000 units $2,000,000 Production costs 25.000 unit Direct materials Direct labor $962,000 462,800 231,400 153,400 Variable factory overhead Fixed factory overhead 1,809,600 Selling and administrative expenses Variable selling and administrative expenses $280,500 108,600 Fixed selling and administrative expenses 389,100 It required, round te per unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Shawnee Motors Inc Absorption Costing Income Statement For the Month Ended August 31 $ 2.000.000 Cost of goods sold

Answer 1

a. Income under Absorption costing Concept

Income under Absorption costing Concept For the month ended August 31 20,00,000 Sales (a) Cost of Goods Sold: Direct material Direct labour Variable Factory OH Fixed factory overhead Total Cost of Goods Sold (b) 9,62,000 4,62,800 2,31,400 1,53,400 18,09,600 1,90,400 Gross Profit (c ) = (a) - (b) Selling and admin expenses: Variable selling and admin expenses Fixed selling and admin expenses Total Selling and admin expenses (d) 2,80,500 1,08,600 3,89,100 Income from Operations (e) = (0) - (d) -1,98,700

b. Income under Variable costing Concept

Income under Variable costing Concept For the month ended August 31 20,00,000 9,62,000 4,62,800 2,31,400 Sales (a) Variable Cost of Goods Sold: Direct material Direct labour Variable Factory OH Total Variable Cost of Goods Sold (b) Manufacturing margin (c) = (a) - (b) Variable selling and admin expenses (d) Contribution margin (e) = (C) - (d) Fixed Cost: Fixed factory overhead Fixed selling and admin expenses Total fixed cost (f) Income from Operations (g) = ( e) - (f) 16,56,200 3,43,800 2,80,500 63,300 1,53,400 1,08,600 2,62,000 -1,98,700