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Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $42.60 per unit) Cost of goods sold (42,000 units × $20 per unit) Gross margin Selling and administrative expenses Net operating income The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $20 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($204,000 ÷ 51,000 units) Absorption costing unit product cost Whitman Company Variable Costing Income Statement Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. Sales Variable expenses: Variable cost of goods sold Variable selling and administrative $ 1,789, 200 Answer is not complete. Complete this question by entering your answers in the tabs below. Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Net operating income 840,000 949,200 483,000 $ 466,200 Required Required 1 2 Redo the company's income statement in the contribution format using variable costing. > 168,000 $ 10 3 3 4 204,000 315,000 $20 $ 1,789,200 168,000 1,621,200 519,000 $ 1.102.200

Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $42.60 per unit) Cost of goods sold (42,000 units × $20 per unit) Gross margin Selling and administrative expenses Net operating income The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $20 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($204,000 ÷ 51,000 units) Absorption costing unit product cost Whitman Company Variable Costing Income Statement Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. Sales Variable expenses: Variable cost of goods sold Variable selling and administrative $ 1,789, 200 Answer is not complete. Complete this question by entering your answers in the tabs below. Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Net operating income 840,000 949,200 483,000 $ 466,200 Required Required 1 2 Redo the company's income statement in the contribution format using variable costing. > 168,000 $ 10 3 3 4 204,000 315,000 $20 $ 1,789,200 168,000 1,621,200 519,000 $ 1.102.200

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...
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Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $42.60 per unit) Cost of goods sold (42,000 units × $20 per unit) Gross margin Selling and administrative expenses Net operating income. Direct materials Direct labor Variable manufacturing overhead The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $20 unit product cost given above is computed as follows: Fixed manufacturing overhead ($204,000 ÷ 51,000 units) Absorption costing unit product cost Whitman Company Variable Costing Income Statement $ 1,789, 200 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. Sales Variable expenses: Variable cost of goods sold Variable selling and administrative 840,000 949,200 483,000 $ 466,200 X Answer is not complete. Complete this question by entering your answers in the tabs below. Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Net operating income Required Required 1 2 Redo the company's income statement in the contribution format using variable costing. 168,000 $ 10 3 204,000 315,000 4 $ 20 $ 1,789,200 168,000 1,621,200 519,000 $ 1,102,200
Transcribed Image Text:Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $42.60 per unit) Cost of goods sold (42,000 units × $20 per unit) Gross margin Selling and administrative expenses Net operating income. Direct materials Direct labor Variable manufacturing overhead The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $20 unit product cost given above is computed as follows: Fixed manufacturing overhead ($204,000 ÷ 51,000 units) Absorption costing unit product cost Whitman Company Variable Costing Income Statement $ 1,789, 200 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. Sales Variable expenses: Variable cost of goods sold Variable selling and administrative 840,000 949,200 483,000 $ 466,200 X Answer is not complete. Complete this question by entering your answers in the tabs below. Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Net operating income Required Required 1 2 Redo the company's income statement in the contribution format using variable costing. 168,000 $ 10 3 204,000 315,000 4 $ 20 $ 1,789,200 168,000 1,621,200 519,000 $ 1,102,200
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