Problem 19-2a variable costing income statement and conversion to absorption costing income lo p2, p3

trez company began operations this year. during this first year, the company produced 100,000 units and sold 80,000 units. the absorption costing income statement for this year follows.

sales (80,000 units × $40 per unit) $ 3,200,000
cost of goods sold
beginning inventory $ 0
cost of goods manufactured (100,000 units × $20 per unit) 2,000,000
cost of good available for sale 2,000,000
ending inventory (20,000 × $20) 400,000
cost of goods sold 1,600,000
gross margin 1,600,000
selling and administrative expenses 590,000
net income $ 1,010,000

additional information

selling and administrative expenses consist of $450,000 in annual fixed expenses and $1.75 per unit in variable selling and administrative expenses.

the company's product cost of $20 per unit is computed as follows.

direct materials $ 4 per unit
direct labor $ 5 per unit
variable overhead $ 3 per unit
fixed overhead ($800,000 / 100,000 units) $ 8 per unit
prepare an income statement for the company under variable costing.

Which of the following is most likely to lead to a general decrease in wages? a. elastic demand b. public goods c. an economic recovery d. immigration 2b2t

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?

United continental holdings, inc., (ual), operates passenger service throughout the world. the following data (in millions) were adapted from a recent financial statement of united. sales (revenue) $38,901 average property, plant, and equipment 17,219 average intangible assets 8,883 1. compute the asset turnover. round your answer to two decimal places.