Home / Expert Answers / Accounting / please-help-a-prepare-an-income-statement-according-to-the-absorption-costing-concept-for-februar-pa609

(Solved): please help a. Prepare an income statement according to the absorption costing concept for Februar ...



please help

student submitted image, transcription available below
student submitted image, transcription available below
student submitted image, transcription available below
a. Prepare an income statement according to the absorption costing concept for February. Enter all amounts as positive numbers. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Sales Cost of goods sold: Beginning inventory Cost of goods manufactured Total cost of goods sold Gross profit Selling and administrative expenses Operating income b. Prepare an income statement according to the variable costing concept for February, Enter all amounts as positive numbers. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Sales Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Sales Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution maroin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses * Total fixed costs Operating income c. What is the reason for the difference in the amount of operating income reported in (a) and (b)? Under the absorption costing method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Unser variable costing , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory chenge. Thus, when inventory decreases, the absorption costing income statement will have a lower Operating income. Income statements under absorption costing and varlable costing Fresno Industries Inc, manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at of capacity (213,000 units) during the first month, creating an ending inventory of 22,000 units. Ouring February, the company produced 191,000 units during the month trut sold 213,000 units at per unit. The February manufacturing costs and selling and administrative expenses were as follows: This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions belien. Open spreadsheet


We have an Answer from Expert

View Expert Answer

Expert Answer



Under absorption costing, all manufacturing costs, both variable and fixed, are assigned to products...
We have an Answer from Expert

Buy This Answer $5

Place Order

We Provide Services Across The Globe