aces incorporated, a manufacturer of tennis rackets, began operations this year. the company produced 6,600…

aces incorporated, a manufacturer of tennis rackets, began operations this year. the company produced 6,600 rackets and sold 5,500. each racket was sold at a price of $96. fixed overhead costs are $89,760 for the year, and fixed selling and administrative costs are $65,800 for the year. the company also reports the following per - unit variable costs for the year.\ndirect materials\ndirect labor $12.18\nvariable overhead 8.18\nvariable selling and administrative expenses 5.24\n2.60\nrequired:\nprepare an income statement under variable costing.\naces incorporated\nincome statement (variable costing)

aces incorporated, a manufacturer of tennis rackets, began operations this year. the company produced 6,600 rackets and sold 5,500. each racket was sold at a price of $96. fixed overhead costs are $89,760 for the year, and fixed selling and administrative costs are $65,800 for the year. the company also reports the following per - unit variable costs for the year.\ndirect materials\ndirect labor $12.18\nvariable overhead 8.18\nvariable selling and administrative expenses 5.24\n2.60\nrequired:\nprepare an income statement under variable costing.\naces incorporated\nincome statement (variable costing)

Answer

Explanation:

Step1: Calculate total variable cost per unit

$12.18 + 8.18+5.24 + 2.60=$28.2$

Step2: Calculate total variable cost for 5,500 units sold

$28.2\times5500 = $155100$

Step3: Calculate total sales revenue

$96\times5500=$528000$

Step4: Calculate contribution margin

$528000 - 155100=$372900$

Step5: Calculate total fixed costs

$89760+65800=$155560$

Step6: Calculate net income

$372900 - 155560=$217340$

Particulars Amount ($)
Sales Revenue 528000
Variable Costs 155100
Contribution Margin 372900
Fixed Costs 155560
Net Income 217340

Answer:

Particulars Amount ($)
Sales Revenue 528000
Variable Costs 155100
Contribution Margin 372900
Fixed Costs 155560
Net Income 217340