On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on
the absorption costing concept:
Weatherford Company Absorption Costing Income Statement For the Month Ended November 30
Sales (104,000 units) $5,200,000
Cost of goods sold: Cost of goods manufactured (120,000 units) $4,560,000
Inventory, November 30 (16,000 units) (608,000)
Total cost of goods sold 3,952,000
Gross profit $1,248,000
Selling and administrative expenses 400,000
Income from operations $848,000
Required :
1. Assume the fixed manufacturing costs were $960,000 and the fixed selling and administrative expenses were $280,000. Prepare an income statement according to the variable costing concept.
Weatherford Company Absorption Costing Income Statement For the Month Ended November 30
Sales (104,000 units) $5,200,000
Cost of goods sold: Cost of goods manufactured (120,000 units) $4,560,000
Inventory, November 30 (16,000 units) (608,000)
Total cost of goods sold 3,952,000
Gross profit $1,248,000
Selling and administrative expenses 400,000
Income from operations $848,000
Required :
1. Assume the fixed manufacturing costs were $960,000 and the fixed selling and administrative expenses were $280,000. Prepare an income statement according to the variable costing concept.
1 answer:
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$504000 is the actual return
<u>Explanation:</u>
particulars calculation Amount
Service cost 700000
Interest cost 480000
Less: Expected return 576000
Prior service cost 48000
Net loss 30000
Pension expense 682000
Therefore, the pension expense is $682000
<u>The computation is as follows for the calculation of return (in $000’s) </u>
<u>Plan assets </u>
Beginning = $5760
Actual return = ?
Cash contributions = 696
Less: Retireee benefits = (624)
Ending balance = $6336
Thus after solving this, we get the actual return that is equal to = $504,000