The Variable Costing Income Statement for Kilem Company for This

question 15

Essay

The variable costing income statement for Kilem Company for this year is as follows: $\begin{array}{crr}\text { Sales ( } 6,000 \text { units) }&&\$120,000\\\text { variable expenses: }\\\text { Cost of Goods Sold } & \$ 36,000 & \\\text { Selling (10\% of sales) } & 12,000 & 48,000 \\\text { Contribution margin } & & \$ 72,000\\\text { Fixed expenses: }\\\text { Manufacturing overhead } & \$ 32,000 \\\text { Administrative } & 14,400 & 38,400\\\text { Net income }&&\$25,600\end{array}$ Selected data for this year concerning the operations of the company are as follows: $\begin{array}{lr}\text { Beginning inventory } & -0 \text { - units } \\\text { Units produced } & 8,000 \text { units }\\\\\text { Manufacturing costs: } & \\\text { Direct labour } &\$ 3.00 \text { per unit } \\\text { Direct materials } & 1.40 \text { per unit }\\\text { Variable manufacturing overhead } & 1.60 \text { per unit } \end{array}$ Required: Prepare an absorption costing income statement for this year.

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Definitions:

Pizza Toppings

Various ingredients added on top of the pizza crust and sauce before baking, such as vegetables, meats, and cheese.

Program Year

A specific period used for administrative, financial, or operational planning and assessment, often aligning with a fiscal or academic calendar.

Ace of Spades

A playing card with a single spade symbol and an 'A' rank, traditionally considered to be the highest card in the deck in many card games.

Ace of Hearts

Typically refers to a playing card in the suit of hearts that features a single pip in the center, often associated with love and happiness in symbolism.