Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 30 per unit Direct labor $ 50 per unit Overhead costs Variable $ 20 per unit Fixed $ 8,400,000 (per year) Selling and administrative costs for the year Variable $ 750,000 Fixed $ 4,000,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 30 per unit Direct labor $ 50 per unit Overhead costs Variable $ 20 per unit Fixed $ 8,400,000 (per year) Selling and administrative costs for the year Variable $ 750,000 Fixed $ 4,000,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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Manufacturing costs
Direct materials	$	30	per unit
Direct labor	$	50	per unit
Overhead costs
Variable	$	20	per unit
Fixed	$	8,400,000	(per year)
Selling and administrative costs for the year
Variable	$	750,000
Fixed	$	4,000,000
Production and sales for the year
Units produced		105,000	units
Units sold		75,000	units
Sales price per unit	$	350	per unit