Question

Problem 19-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. $4,000,000 Sales (80,000 units * $50 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units X $30 per unit) Cost of good available for sale Ending inventory (20,000 $30) Coat of goods sold Gross margin Selling and administrative expenses Net income 3,000,000 3.000.000 600,000 2,400,000 1,600,000 560,000 $1,040,000 Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $30 per unit is computed as follows. Direct materials Direct labor Variable overhead Pixed overhead ($700,000 / 100,000 units) $5 per unit $15 per unit $3 per unit $ 7 per unit

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Answer 1

TREZ Company
Variable Costing Income Statement
Sales		$    40,00,000
Variable Expenses
Direct Materials	$          4,00,000
Direct Labor	$       12,00,000
Variable Overhead	$          2,40,000
Selling and Administrative expense	$          1,60,000
Total Variable expenses		$    20,00,000
Contribution Margin		$    20,00,000
Fixed Costs
Fixed Overhead	$          7,00,000
Selling and Administrative expense	$          4,00,000
Total Fixed Costs		$    11,00,000
Net Income/ (Loss)		$       9,00,000

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А в TREZ Company Variable Costing Income Statement 5 80000 Sales 4000000 -A5*5 Variable Expenses Direct Materials Direct Labor Variable Overhead Selling and Administrative expense =A5*15 -A53 I=A5*2 =SUM(C7:C11) =D5-D12 Total Variable expenses Contribution Margin Fixed Costs Fixed Overhead Selling and Administrative expense 700000 400000 Total Fixed Costs Net Income (Loss) =SUM(C15:017) =D13-D18

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