SBW Corporation Planned to Be in Operation for Three Years

question 101

Essay

SBW Corporation planned to be in operation for three years.
∙ During the first year,2016,it had no sales but incurred $120 000 in variable manufacturing expenses and $40 000 in fixed manufacturing expenses.
∙ In 2017,it sold half of the finished goods inventory from 2016 for $100 000 but it had no manufacturing costs.
∙ In 2018,it sold the remainder of the inventory for $120 000,had no manufacturing expenses and went out of business.
∙ Marketing and administrative expenses were fixed and totalled $20 000 each year.
Required:
a.Prepare an income statement for each year using absorption costing.
b.Prepare an income statement for each year using variable costing.
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Definitions:

Job Descriptions

A formal account of an employee's responsibilities, duties, and the scope of work expected from a particular position.

Job Specifications

Detailed descriptions of the qualifications, skills, and experience required to perform a specific job.

Competency Models

Frameworks that define the skills, knowledge, and abilities required for effective performance in a specific job or profession.

Competencies

Competencies are the skills, knowledge, and abilities that enable an individual to perform tasks effectively in a job or life situations.