The Variable Costing Income Statement for Jackson Company for the Current

question 68

Essay

The variable costing income statement for Jackson Company for the current year is as follows:
$\begin{array}{lll}\text {Sales (5,000 units)}&&\$100,000\\\text {Variable expenses:}\\\text {Cost of goods sold}&\$30,000\\\text {Selling (10\% of sales)}& \underline{10,000}& \underline{40,000}\\\text {Contribution margin}&&\$60,000\\\text {Fixed expenses:}\\\text { Manufacturing overhead } &\$ 24,000\\\text { Administrative }& \underline{14,400 }& \underline{38,400} \\\text { Net income } && \underline{\$21,600 }\\\end{array}$

$\text { Selected data for } 2011 \text { concerning the operations of the company are as follows: }$

$\begin{array}{ll}\text { Beginning inventory } & 0 \text { units } \\\text { Units produced } & 8,000 \text { units }\end{array}$

$\begin{array}{lr}\text { Manufacturing costs: }\\\text { Direct labour } & \$ 3.00 \text { per unit } \\\text { Direct materials } & 1.60 \text { per unit } \\\text { Variable overhead } & 1.40 \text { per unit }\end{array}$ Prepare an absorption costing income statement for the current year.

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Definitions:

Organization Characteristics

Distinctive features that define the nature and behavior of an organization.

Contingency Factors

External and internal conditions that influence the effectiveness of management strategies and determine the success of certain managerial actions.

Motivational Practice

Techniques or strategies used to inspire or encourage individuals or groups to achieve their goals or improve their performance.

Organization Characteristics

The features and attributes that define an organization's structure, culture, and processes.