Test (2) - 1 Evolution of Income Statement Income statement...

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Unformatted text preview: 1 Evolution of Income Statement Income statement evolution came about when Bill Carson realized that his segmented income statements at SoftSolutions should have better evaluated. Use a segmented report to isolate costs from items that were not. He decided to use the contribution format income statement than the conventional absorption cost reports. By using contribution, he was able to have the cost of goods sold with only the variable cost, have variable and fixed cost in separate section of the report, and have a contribution margin. This can be called the segment margin. 2 Sebolt Wire Company Problem 5-11 Month Ingots Power Cost January 110 $ 5,500 Feb 90 $ 4,500 March 80 $ 4,400 April 100 $ 5,000 May 130 $ 6,000 June 120 $ 5,600 July 70 $ 4,000 August 60 $ 3,200 Sept 50 $ 3,400 October 40 $ 2,400 V/C unit = Cost High /A high cost - cost low/A low 6000 2400 = 40 per day 6000 $130 40 TFC 6000 $130 40 TFC 5200 TFC = 6000 - 52000 = 800 y= x (m)+b Total Cost 1000 (40) + 800 = 40800 3 CompuDesk, Inc., Problem 8-1 Units Beginning Inventory 0 Direct Materials $60 Units Produced 10,000 Direct Labor $30 Units Sold 9,000 Variable Manufacturing Overhead $10 Units in Ending Inventory 1,000 Variable Selling and Administrative $20 Total Variable Cost per Unit $120 Fixed Manufacturing Overhead $300,000 Fixed Selling and Administrative $450,000...
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This note was uploaded on 12/07/2011 for the course ACC 344 taught by Professor Hellopet during the Summer '11 term at South Florida Community College.

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