Question

Help Seve&Exit Submit Check my work QS 21-19B Variable costing income statement LO P5 Aces Inc., a manufacturer of t ennis rackets, began operations this year. The company produced 6.200 rackets and sold 5,100 Each racket was sold at a price of $92. Fixed overhead costs are $81,840, and fixed selling and administrative costs are $65,400. The company also reports the following per unit costs for the year Variable production costs Variable selling and administrative expenses $25.20 s2.20 Required: Prepare an income statement under variable costing Variable C Net income (lees) Neat

Answer 1

	CALCULATION OF CLOSING STOCK
	Opening Stock =	0	Units
	Add: Production =	6200	Units
	Less: Sales	5100	Units
	Closing Stock	1100	Units
	Calculation of Unit Cost of Production by using Variable Costing
	Particulars	Amount
		Cost per Unit
	Variable Cost Per Unit	$                25.20
	Total Manufacturing Variable Cost	$                25.20
	CALCULATION OF VALUE OF CLOSING STOCK FOR 1100 Units
	Closing Stock Value = (1100 units X $ 25.20)	$             27,720
	VARIABLE COSTING INCOME STATEMENT
		Variable Costing
	Sales (5,100 Units X $ 92)	$          4,69,200
	Beginning inventory
	Add: Variable Cost of Goods (6,200 Units *$ 25.20)	$          1,56,240
	Less: Ending inventory ( 1,100 Units X $ 25.20)	$             27,720
	Cost of Goods Sold	$          1,28,520
	Less: Variable Selling and administration expenses (5100 Units X $ 2.20)	$             11,220
	Contribution margin	$          3,29,460
	Fixed Cost
	Fixed Overhead Cost	$             81,840
	Fixed Selling and adminisitration expenses	$             65,400
	Net Income(Loss)	$          1,82,220