Tamworth Company Prepared the Following Absorption-Costing Income Statement for the Year

question 169

Essay

Tamworth Company prepared the following absorption-costing income statement for the year ended 31 May 2018.
$\begin{array}{lr}\text { Sales (16 000 units) } & \$ 320000 \\\text { Cost of goods sold } & 216000 \\\text { Gross margin } & \$ 104000 \\\text { Selling and administrative expenses } & \$ 6000 \\\text { Operating profit } & \$ 58000\end{array}$
Additional information follows:
Selling and administrative expenses include $1.50 of variable cost per unit sold.There was no beginning inventory,and 17 500 units were produced.Variable manufacturing costs were $11 per unit.Actual fixed costs were equal to budgeted fixed costs.
Required:
Prepare a variable-costing income statement for the same period.
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Definitions:

Nature Versus Nurture

A debate concerning the relative importance of an individual's innate qualities versus personal experiences in determining or causing differences in physical and behavioral traits.

Social Experiences

Interactions with others that influence an individual's behavior, beliefs, and feelings.

Genotypic Characteristics

Describes the genetic makeup of an organism and how these genes express themselves in physical and behavioral traits.

Teratogens

Agents, such as chemicals or viruses, that can cause congenital anomalies or developmental disorders in a developing fetus.