Pippen Company prepared the following absorption- costing income statement for the year ended May 31, 20X5: $$\begin{array} { l l }
\text { Sales } ( 16,000 \text { units } ) & \$ 320,000 \
\text { Cost of goods sold } & \underline { 216,000 } \
\text { Gross margin } & \$ 104,000 \
\text { Selling and administrative expens es } & \underline { 46,000 } \
\text { Op erating inc ome } & \$ 58,000
\end{array}$$ Additional information follows:
Selling and administrative expenses include $1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were $11 per unit. Actual fixed costs were equal to budgeted fixed costs.
Required:
Prepare a variable costing income statement for the same period.

Question

Pippen Company prepared the following absorption- costing income statement for the year ended May 31, 20X5: $$\begin{array} { l l } 
\text { Sales } ( 16,000 \text { units } ) & \$ 320,000 \
\text { Cost of goods sold } & \underline { 216,000 } \
\text { Gross margin } & \$ 104,000 \
\text { Selling and administrative expens es } & \underline { 46,000 } \
\text { Op erating inc ome } &  \$ 58,000
\end{array}$$ Additional information follows:
Selling and administrative expenses include $1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were $11 per unit. Actual fixed costs were equal to budgeted fixed costs.
Required:
Prepare a variable costing income statement for the same period.

Quizplus · Accepted Answer

The Answer of Pippen Company prepared the following absorption- costing income statement for the year ended May 31, 20X5: $$\begin{array} { l l } 
\text { Sales } ( 16,000 \text { units } ) & \$ 320,000 \
\text { Cost of goods sold } & \underline { 216,000 } \
\text { Gross margin } & \$ 104,000 \
\text { Selling and administrative expens es } & \underline { 46,000 } \
\text { Op erating inc ome } &  \$ 58,000
\end{array}$$ Additional information follows:
Selling and administrative expenses include $1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were $11 per unit. Actual fixed costs were equal to budgeted fixed costs.
Required:
Prepare a variable costing income statement for the same period.

Pippen Company Prepared the Following Absorption- Costing Income Statement for the Year