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Instructions Labels and Amount Descriptions Absorption Costing Income Statement Instructions The production costs and selling and administrative expenses, based on production of 10,000 units in September, are as follows: Direct materials Direct labor Variable manufacturing cost Variable selling and administrative expenses Fixed manufacturing cost Fixed selling and administrative expenses $35 per unit 24 per unit 8 per unit 6 per unit $100,000 for September 40,000 for September Sales for October are expected to drop about 40% below those of September. No significant changes are anticipated in the fixed costs or variable costs per unit. No extra costs will be incurred in discontinuing operations in the portion of the plant associated with solvent. The inventory of solvent at the beginning and end of October is not expected to be significant (material). Required: 1. Prepare an estimated income statement in absorption costing form for October for solvent, assuming that production continues during the month. 2. Prepare an estimated income statement in variable costing form for October for solvent, assuming that production continues during the month 3. What would be the estimated operating loss if the solvent production were temporarily suspended for October? If a cured at t amount as a negative number using a minus sign Check My Work All work saved Email Instructor Save and Ext Submit Assignment for G
Required: 1. Prepare an estimated income statement in absorption costing form for October for solvent, assuming that production continues during the month." 2. Prepare an estimated income statement in variable costing form for October for solvent, assuming that production continues during the month 3. What would be the estimated operating loss if the solvent production were temporarily suspended for October? a loss s med enter that amount as a negative number using a minus sign 4. What advice should you give to management? "Be sure to complete the statement heading Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amounts calculation that results in a negative amount. For example: Net loss should be negative
Labels and Amount Descriptions Labels Cost of goods sold Fixed costs For the Month Ending October 31 October 31 Selling and administrative expenses Variable cost of goods sold Amount Descriptions Contribution margin Contribution margin ratio Direct labor Direct materials Fixed manufacturing cost Fixed selling and administrative expenses Gross profit Operating income Operating loss
Labels and Amount Descriptions Contribution margin ratio Direct labor Direct materials Fixed manufacturing cost Fixed selling and administrative expenses Gross profit Operating income Operating loss Manufacturing margin Planned contribution margin Sales Sales mix Total cost of goods sold Total fixed costs Total selling and administrative expenses Total variable cost of goods sold Variable manufacturing cost Variable selling and administrative expenses
Absorption Costing Income Statement 1. Prepare an estimated income statement in absorption costing form for October for solvent, assuming that production continues during the month. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative Question not attempted. (Label) Logan Industries Inc. Estimated Income Statement-Absorption Costing-Solvent (Label) superior product can be started on November 1, one month in the future. Shaded cells have feedback Score: 0/101
k Absorption Costing Income Statement 7 1 10 11 12 (Label) 13 Feedback Check My Work at the manufacture of a superior product can be started on November 1, one month in the future Shaded cells have feedback 16/25 Under absorption costing, the cost of goods sold includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included a pet of factory overhead.
Variable Costing Income Statement 2. Prepare an estimated income statement in variable costing form for October for solvent, assuming that production continues during the month. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear it is required Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative Question not attempted. Logan Industries Inc. Estimated Income Statement-Variable Costing-Solvent (Label) Shaded cells have feedback Score: 0/116
Variable Costing Income Statement 6 9 10 (Label) 11 11 13 aded cells have feed Shaded cells have feedb
K that the manufacture of a superior product can be started on November 1, one month in the future. No changes will be needed in the present production facilities to manufacture the new product because only the mixture of the various materials will be changed, Final Questions Shaded cells have feedback 3. What would be the estimated operating loss if the solvent production were temporarily suspended for October? If a loss is incurred, enter that amount as a negative number using a minus sign. $ Feedback 4. What advice should you give to management? $1 Points 1011
Final Questions Shaded cells have feedback 3. What would be the estimated operating loss if the solvent production were temporarily suspended for October? If a loss is incurred, enter that amount as a negative number using a minus sign Feedback 10/1 4. What advice should you give to management? Production of solvent should be continued ✔ Temporary suspension of production would result in an operating loss of $140.000 compared with an operating of $98.000 it production is continued. The result would be a savings of $42.000✔