Question

Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 5,500 rackets and sold 4,400. Each racket was sold at a price of $85. Fixed overhead costs are $68,750, and fixed selling and administrative costs are $64.700. The company also reports the following per unit variable costs for the year. Variable product costs Variable selling and administrative expenses $ 24.50 $ 1.50 Prepare an income statement under variable costing ACES INC. Variable Costing Income Statement Net Income (los)

Answer 1

ACES INC.

Variable costing Income statement

Sales(4400×$85)		$374000
Less:
Variable cost:
Variable product cost (4400×$24.50)	$107800
Variable selling and admistrative expenses (4400×$1.50)	$ 6600
Total variable cost		$114400
Contribution margin		$259600
Less:
Fixed Cost:
Fixed overhead cost	$68750
Fixed selling and administrative cost	$64700
Total Fixed Cost		$133450
Net Income		$126150