Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs for the year Variable overhead $ 3,000,000 Fixed overhead $ 7,000,000 Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing?

1. Prepare an income statement for the year using variable costing.

Sales ( $ 350 × 70,000)                                                                $ 24,500,000

Less Cost of Sales                                                                           $9,100,000

Opening Stock of Finished Goods                                                         0

Add Manufacturing Cost of Finished Goods( $130 ×100,000)   $13,000,000

Less Closing Stock of Finished Goods ($130×30,000)               ($3,900,000)

Contribution                                                                                   $15,400,000

Less Expenses

Fixed Manufacturing Overheads                                                ($ 7,000,000)

Selling and administrative costs:

Variable                                                                                            ($ 770,000)

Fixed                                                                                              ($4,250,000)

Net Income                                                                                      $3,380,000

2. Prepare an income statement for the year using absorption costing.

Sales ( $ 350 × 70,000)                                                                $ 24,500,000

Less Cost of Sales                                                                          $14,000,000

Opening Stock of Finished Goods                                                         0

Add Manufacturing Cost of Finished Goods( $200 ×100,000)  $20,000,000

Less Closing Stock of Finished Goods ($200×30,000)              ($6,000,000)

Gross Profit                                                                                     $10,500,000

Less Expenses

Selling and administrative costs:

Variable                                                                                            ($ 770,000)

Fixed                                                                                              ($4,250,000)

Net Income                                                                                      $5,480,000

3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing

When Production is Equal to Sales

Explanation:

The Variable Costing and The Absorption Costing Differ in two aspects. That is the Accumulation of Product Costs and the Accumulation of Period Costs.

Product Costs

Variable Costing = Direct Labor + Direct Materials + Variable Overheads

                            = $ 60 + $40 + $ 30

                            = $130

Absorption Costing = Direct Labor + Direct Materials + Variable Overheads + Fixed Manufacturing Overheads

                                 = $ 60 + $40 + $ 30 + $70

                                 = $200

Periodic Cost

Variable Costing = Fixed Manufacturing Overheads + Non- Manufacturing Overheads

Absorption Costing = Non- Manufacturing Overheads

Units of Closing Stock Calculation :

Production - Sales

100,000-70,000

30,000

the first successful, urban blues recording, selling more than 75,000 copies, was made in year 1920.

mamie smith recorded the first commercially successful example of the urban blues,   with the recording of “crazy blues”."crazy blues" was recorded on august 10, 1920, in new york city. within a month of the release of “crazy blues” it had sold 75,000 copies.

answer; balance sheets;