Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,025 kayaks and sol

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Kenzi A Manufacturer Of Kayaks Began Operations This Year During This Year The Company Produced 1 025 Kayaks And Sol 1 (337.81 KiB) Viewed 112 times

Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,025 kayaks and sold 775 at a price of $1,025 each. At year-end, the company reported the following income statement information using absorption costing. Sales (775 * $1,025) Cost of goods sold (775 * $ 425) Gross profit Selling and administrative expenses Income $ 794,375 329,375 465,000 230,000 $ 235,000 Additional Information a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $102,500 of fixed overhead per year divided by 1,025 kayaks produced. b. The $230,000 in selling and administrative expenses consists of $105,000 that is variable and $125,000 that is fixed. Prepare an income statement for the current year under variable costing. KENZI Income Statement (Variable Costing) Income