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PROBLEM 20-1 On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The...

PROBLEM 20-1

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:




(a) Prepare an income statement in accordance with absorption costing.

Townsend Co.
Absorption Costing Income Statement
For Month Ended January 31, 20--

Sales $
Cost of goods sold:
Cost of goods manufactured $
Less inventory, January 31, 20--
Cost of goods sold
Gross profit $
Selling and administrative expenses
Income from operations $

(b) Prepare an income statement in accordance with variable costing.

Townsend Co.
Variable Costing Income Statement
For Month Ended January 31, 20--

Sales $
Variable cost of goods sold:
Variable cost of goods manufactured $
Less inventory, January 31, 20--
Variable cost of goods sold
Manufacturing margin $
Variable selling and administrative expense
Contribution margin $
Fixed costs:
Fixed manufacturing costs $
Fixed selling and administrative expenses
Income from operations $




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