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Income Statements and Firm Performance: Variable and Absorption Costing Jellison Company had the following operating data for its first two years of operations: Variable costs per unit: Direct materials 4.00 Direct labor $2.90 Variable overhead 1.50 Fixed costs per year: Overhead 180,000 Selling and administrative 70,500 Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was $12. Jellison uses an actual costing system for product costing.
Required: 1. Prepare income statements for both years using absorption costing. If an amount is zero, enter "o". Jellison Company Absorption-Costing Income Statement For Years 1 and 2 Year 1 Year 2 Sales 960,000 1,080,000 ✓ Less: Cost of goods sold 832,000 ✓ 956,000 Gross profit 128,000 $ 124,000 Less: Fixed selling and administrative expenses 70,500 ✓ 70,500 ✓ Operating income Cost of goods sold: Beginning inventory ✓ $ Cost of goods manufactured Goods available for sale ✓ $ $ Less: Ending inventory Cost of goods sold Feedback Check My Work Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? Improved Declined Check My Work
2. Prepare income statements for both years using variable costing. If an amount is zero, enter "0". Jellison Company Variable-Costing Income Statement For Years 1 and 2 Year 1 Year 2 Contribution margin Less: DELID DON Operating income Variable cost of goods sold: Cost of goods sold Feedback Check My Work Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? Check My Work Next All work saved. Save and Exit Submit Assignment for Grading