Wrap-It Company, a Manufacturer of Wrapping Paper, Began Operations on June

question 53

Essay

Wrap-It Company, a manufacturer of wrapping paper, began operations on June 1 of the current year.During this time, the company produced 370,000 units and sold 310,000 units at a sales price of $50 per unit.Cost information for this period is shown in the following table:
$\begin{array}{l}\text { Production costs }\\\begin{array}{ll}\text { Direct materials } & \$ 2.00 \text { per unit } \\\text { Direct labor } & \$ 80 \text { per unit } \\\text { Variable overhead } & \$ 814,000 \text { in total } \\\text { Fixed overhead } & \$ 481,000 \text { in total } \\\text { Jonproduction costs } & \\\text { Variable selling and administrative } & \$ 78,000 \text { in total } \\\text { Fixed selling and administrative } & \$ 210,000 \text { in total }\end{array}\end{array}$ a.Prepare Wrap-It's December 31^t income statement for the current year under absorption costing.
b.Prepare Wrap-It's December 31 income statement for the current year under variable costing.

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Definitions:

MgO Content

The percentage of Magnesium Oxide present in a geological sample, important in determining rock composition and origins.

SiO Content

Refers to the concentration of Silicon Dioxide, a common compound found in the Earth's crust, often significant in determining the composition of rocks and soils.

Mafic Minerals

Dark-colored minerals that are rich in magnesium and iron, typically found in basalt and other mafic rocks.

Quartz

A hard, crystalline mineral composed of silicon and oxygen atoms, used in making jewelry, electronics, and optical devices.