The Variable Costing Income Statement for Bouve Company Is Seen $\begin{array} { l }\text { Sales }(6,000 \text { untits } \times \$ 35)&\$210,000\\\end{array}$

question 60

Essay

The variable costing income statement for Bouve Company is seen below:
$\begin{array} { l }\text { Sales }(6,000 \text { untits } \times \$ 35)&\$210,000\\\end{array}$

Variable expenses:
$\begin{array} { l }\text { Beginning inventory ( } 680 \text { units } \times \$ 20 \text { ) }&\$ 13,600\\\end{array}$

Variable cost of goods manufactured
$\begin{array}{ll}(6,400 \text { units } \times \$ 20) & 128,000 \\\text { Available for sale } & 141,600 \\\text { Less: Ending inventory }(1,080 \text { units } \times \$ 20) & 21,600\\\text { Variable manufacturing cost of goods sold }&120,000\\\text { Variable selling and administrative expenses }&24,000\\\text { Contribution margin }&66,000\end{array}$
Fixed expenses:
$\begin{array} { l } \text {Fixed factory overhead }&20,000 \\ \text {Fixed selling and administrative expenses }&15,300 \\ \text { Operating income}&\$30,700 \\\end{array}$

Required:
Prepare an absorption-costing income statement for the same period of time.Assume that actual fixed costs were equal to budgeted fixed costs and the budgeted fixed overhead rate was constant over the period examined.Assume the production volume variance equals zero.

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Definitions:

Surplus

The situation in which the quantity supplied of a good exceeds the quantity demanded, often resulting in downward pressure on the price.

Thomas Robert Malthus

An English economist and demographer best known for his theory that population growth will outpace agricultural production, leading to widespread poverty and famine.

Malthusian Theory Of Population

Population tends to grow in a geometric progression (1, 2, 4, 8, 16), while food production tends to grow in an arithmetic progression (1, 2, 3, 4, 5).

Health Care System

The organization of people, institutions, and resources to deliver health care services to meet the health needs of target populations.