San Diego State University Operations And Supply Chain Management Assignment Help - Inventory

Question - Problem 19-1A Variable costing income statement and conversion to absorption costing income L.O.
P2, P4 Torres Company began operations this year. During this first year, the company produced
100,000 units and sold 80,000 units. The absorption costing income statement for its first year of
operations follows. Sales (80,000 units Af— $50 per unit) $ 4,000,000 Cost of goods sold Beginning
inventory $ 0 Cost of goods manufactured (100,000 units Af— $30 per unit) 3,000,000 Cost of good
available for sale 3,000,000 Ending inventory (20,000 Af— $30) 600,000 Cost of goods sold
2,400,000 Gross margin 1,600,000 Selling and administrative expenses 510,000 Net income $
1,090,000 Additional Information a. Selling and adminis ...Read More trative expenses consist of $350,000 in annual
fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's
product cost of $30 per unit is computed as follows. Direct materials $ 4 per unit Direct labor $ 15 per
unit Variable overhead $ 3 per unit Fixed overhead ($800,000 / 100,000 units) $ 8 per unit Required:
1. Prepare an income statement for the company under variable costing. (Input all amounts as
positive values except net loss which should be indicated with a minus sign. Omit the "$" sign in your
response.) ...Read Less

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