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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