Answer:
See explanation section.
Explanation:
Requirement 1
Crystal Cold’s
Absorption Costing Income Statement
For the year ending, December 20YY
Sales revenue ($2,400 units × $ 350) = $840,000
Less: Cost of goods sold
Direct materials ($2,400 units × 60) = $144,000
Direct labor ($2,400 units × 50) = $120,000
Variable manufacturing overhead ($2,400 units × 11) = $26,400
Fixed manufacturing overhead = $232,500
Total cost of goods sold = $522,900
Gross profit = $317,100
Less: Selling, General & Administrative expenses
Variable SG&A = $33,600
Fixed SG&A = $64,000
Total SG&A = $97,600
Net Income = $219,500
Requirement 2
Crystal Cold’s
Variable Costing Income Statement
For the year ending, December 20YY
Sales revenue ($2,400 units × $ 350) = $840,000
Less: Variable product cost
Direct materials ($2,400 units × 60) = $144,000
Direct labor ($2,400 units × 50) = $120,000
Variable manufacturing overhead ($2,400 units × 11) = $26,400
Variable selling expense $33,600
Total variable expenses = $324,000
Contribution margin = $516,000
Less: Fixed expenses
Fixed manufacturing overhead = $232,500
Fixed selling expense = $64,000
Total fixed expense = $296,500
Net Income = $219,500
