Question

Return to question Consider the following information for Presidio Inc.'s most recent year of operations. Additional information for Presidio's most recent year of operations follows: 2,400 $ Number of units produced Number of units sold Unit sales price Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Pixed manufacturing overhead per unit ($282,960 - 2,400 units) Total variable selling expenses ($14 per unit sold) Total fixed general and administrative expenses 1,500 630.00 65.00 95.00 45.00 117.90 21,000.00 74,000.00 Required: 2. Complete a full absorption costing income statement and a variable costing income statement for Presidio. Assume there was no beginning inventory. Answer is not complete. Presidio, Inc. Full Absorption Income Statement $ Sales 945,000 Less: Cost of Goods Sold Gross Margin 484,350 21,000 General and Administrative Expense Less: Selling Expense 74.000 21,000

Answer 1

1)	Full Absorption costing income statement
	Sales				$ 9,45,000.00
Less:	Cost of Goods sold				$ 4,84,350.00
	Gross Margin				$ 4,60,650.00
Less:	Variable Selling Expenses				$    21,000.00
Less:	Fixed General and Administrative Expense				$    74,000.00
	Net Operating Income				$ 3,65,650.00
2)	Contribution Format Income Statement
	Sales				$ 9,45,000.00
Less:	Variable Manufacturing Cost				$ 3,07,500.00
Less:	Variable Selling Expenses				$    21,000.00
	Contribution Margin				$ 6,16,500.00
Less:	Fixed Manufacturing Cost				$ 2,82,960.00
Less:	Fixed General and Administrative Expense				$    74,000.00
	Net Operating Income				$ 2,59,540.00
3)	Difference in profit				$ 1,06,110.00