Question

Exercise 6-17 (Part Level Submission)

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs.

Variable Costs per Unit
Direct materials		$10.05
Direct labor		$4.62
Variable manufacturing overhead		$7.77
Variable selling and administrative expenses		$5.23
Fixed Costs per Year
Fixed manufacturing overhead		$311,550
Fixed selling and administrative expenses		$281,534

Siren Company sells the fishing lures for $33.50. During 2020, the company sold 81,000 lures and produced 93,000 lures.

Prepare an absorption costing income statement for 2020. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) SIREN COMPANY Income Statement For the Year Ended December 31, 2020 Absorption Costing Sales 2713500 T cost of Goods Sold 1795200 Gross Profit 9183001 T Variable Selling and Administrative Expenses 418400 Fixed Selling and Administrative Expenses 281534 699934 Net Income/(Loss) -49634

Answer 1

--Requirement, along with calculations

Income Statement
for the year ended 31 Dec 2020
Sales	[81000 x $ 33.50]	$2,713,500
Cosst of Goods Sold	[81000 x {10.05+4.62+7.77+(311550/93000)}]	$2,088,990
Gross Profits		$624,510
Variable selling & admin expense [81000 x $ 5.23]	$423,630
Fixed selling & admin expense	$281,534
		$705,164
Net Income (loss)		($80,654)