The following information relates to Jorgensen Manufacturing Products for calendar year 2011, the company’s first year of operation:
Units produced 8,050
Units sold 7,300
Selling price per unit $4,800
Direct material per unit $2,030
Direct labor per unit $1,250
Variable manufacturing overhead per unit $990
Variable selling cost per unit $225
Annual fixed manufacturing overhead $829,150
Annual fixed selling and administrative expense $401,600
Prepare an income statement using full costing. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 2. Enter all amounts as positive amounts and subtract where necessary.)
Jorgensen Manufacturing
Income Statement
For the Year End December 31, 2011
$
Less
Gross margin
Less:
Net income $
Prepare an income statement using variable costing. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 2. Enter all amounts as positive amounts and subtract where necessary.)
Jorgensen Manufacturing
Income Statement
For the Year End December 31, 2011
$
Less:
Contribution margin
Less:
Net income $
Calculate the amount of fixed manufacturing overhead that will be included in ending inventory under full costing.
$
What is the difference between income computed under variable costing and income computed under full costing?
$
Suppose that the company sold 8,050 units during the year. What would the variable costing net income have been?
$
What would the full costing net income have been?
$