The Following Information Is Available for the Crossover Company

question 139

Essay

The following information is available for the Crossover Company:
Sales: 25,000 units per year at $45 per unit
Production: 30,000 units in 2019 and 20,000 units in 2020
At the beginning of 2019 there was no inventory
Variable manufacturing costs are $30.00 per unit
Fixed manufacturing costs are $150,000 per year
Marketing costs are all fixed at $75,000 per year
Required:
(a) Prepare a gross margin income statement under absorption costing for 2019 and 2020. Include a column for each year and a total column.
(b) Prepare a contribution margin income statement under variable costing for 2019 and 2020. Include a column for each year and a total column.
(c) Comment on the results and reconcile any differences in income.

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Definitions:

Procedural Memory

A type of long-term memory responsible for knowing how to perform different actions and skills.

Nondeclarative Memory

A type of long-term memory for skills, procedures, and conditioned responses that can be performed without conscious awareness.

Memory-Blocking Drug

A hypothetical or experimental substance that can prevent the formation of new memories or impair the retrieval of existing ones.

Sensory Memory

The shortest-term element of memory, which is the ability to retain impressions of sensory information after the original stimuli have ended.