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azamat
3 years ago
13

Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity d

uring the first month. The following data summarize the results for August: Sales (10,000 units) Production costs (13,000 units): $1,000,000 Direct materials Direct labor Variable factory overhead Fixed factory overhead $481,000 231,400 115,700 76,700 904,800 Selling and administrative expenses: Variable selling and administrative expenses $140,200 Fixed selling and administrative expenses 54,300 194,500 If required, round interim per-unit calculations to the nearest cent. Required:Prepare an income statement according to the absorption costing concept.
Business
1 answer:
kozerog [31]3 years ago
3 0

Answer:

Shawnee Motors Inc.

Income Statement

For the month ended August 31, 202x

Sales revenue                                                    $1,000,000

- COGS                                                               <u> ($696,000)</u>

Gross profit                                                           $304,000

S&A expenses:

  • Variable S&A expenses   $140,200
  • Fixed S&A expenses         $54,300           <u>($194,500)</u>

Operating profit                                                    $109,500

Explanation:

Sales (10,000 units) $1,000,000

Production costs (13,000 units):

  • Direct materials $481,000
  • Direct labor $231,400
  • Variable factory overhead $115,700
  • Fixed factory overhead $76,700
  • Total production costs $904,800

Selling and administrative expenses:

  • Variable selling and administrative expenses $140,200
  • Fixed selling and administrative expenses $54,300
  • Total S&A expenses $194,500

COGS = (10,000 / 13,000) x $904,800 = $696,000

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We need to compare 3,000.00 per month to 20.00per hr

So first to compare lets see how many hours are there in a month.

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First we need to multiply 20.00 with the number hours in a month to get it.

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