Joplin Company

Question

Variable Costing Income Statement
For the Month Ended April 30
Line Item Description Amount Amount

Sales
$Sales
125,400
Variable cost of goods sold:

Variable cost of goods manufactured
$Variable cost of goods manufactured
79,904.88

Inventory, April 30
Inventory, April 30

Total variable cost of goods sold
Total variable cost of goods sold

Manufacturing margin
$Manufacturing margin

Variable selling and administrative expenses
Variable selling and administrative expenses
10,960

Contribution margin
$Contribution margin
Fixed costs:

Fixed manufacturing costs
$Fixed manufacturing costs
25,233.12

Fixed selling and administrative expenses
Fixed selling and administrative expenses
10,520

Total fixed costs
Total fixed costs
35,753.12

Operating income
$Operating income
Feedback Area
Feedback
Sales - (Variable Cost of Goods Manufactured* - Variable Costing Ending inventory**) = Manufacturing Margin; Manufacturing Margin - Variable Selling and Administrative Expenses = Contribution Margin; Contribution Margin - (Fixed Manufacturing Costs + Fixed Selling and Administrative Expenses) = Operating income

*Variable Cost of Goods Manufactured = Total Cost of Goods Manufactured - Fixed Manufacturing Cost

**Variable Costing Ending Inventory = (Variable Cost of Goods Manufactured/Total Units of Goods Manufactured) x Absorption Costing Ending Inventory Units (given)

Check My Work

Answer 1

To complete the Variable Costing Income Statement for Joplin Company as of April 30, we will follow the provided formulas and input the respective amounts where necessary.

1. Start with Sales:

   • Sales = $125,400

2. Variable Cost of Goods Sold:

   • Variable Cost of Goods Manufactured = $79,904.88
   • To calculate the Total Variable Cost of Goods Sold, we need to subtract the Variable Costing Ending Inventory from the Variable Cost of Goods Manufactured. Since the ending inventory amount is not provided, let's denote it temporarily as \( X \).

   The Total Variable Cost of Goods Sold can be expressed as: \[ \text{Total Variable Cost of Goods Sold} = \text{Variable Cost of Goods Manufactured} - X \]

3. Manufacturing Margin: Using the formula given: \[ \text{Manufacturing Margin} = \text{Sales} - \text{Total Variable Cost of Goods Sold} \] We will denote this margin as \( M \) until we can finish the calculations.

4. Variable Selling and Administrative Expenses:

   • Variable selling and administrative expenses = $10,960

5. Contribution Margin: We can calculate it as: \[ \text{Contribution Margin} = \text{Manufacturing Margin} - \text{Variable Selling and Administrative Expenses} \]

6. Fixed Costs:

   • Fixed manufacturing costs = $25,233.12
   • Fixed selling and administrative expenses = $10,520
   • Total fixed costs can be calculated as: \[ \text{Total Fixed Costs} = \text{Fixed Manufacturing Costs} + \text{Fixed Selling and Administrative Expenses} = 25,233.12 + 10,520 = 35,753.12 \]

7. Operating Income: The operating income is calculated as: \[ \text{Operating Income} = \text{Contribution Margin} - \text{Total Fixed Costs} \]

To finalize the income statement, we need to calculate the total variable cost of goods sold and the contribution margin by determining the value of \( X \) (the Variable Costing Ending Inventory).

If you have more details or numbers for the ending inventory or total units manufactured, please provide it so we can plug in the values. Otherwise, based on the provided feedback, the initial calculations can be handled in a general formula way unless actual inventory numbers are supplied.

Now, let's recap the income statement format but remain with variables until we can substitute known quantities:

Variable Costing Income Statement

For the Month Ended April 30 | Line Item Description | Amount | |---------------------------------------------------------|-----------------| | Sales | $125,400 | | Variable cost of goods sold: | | | - Variable Cost of Goods Manufactured | $79,904.88 | | - Ending Inventory (Variable Costing) | - \( X \) | | Total Variable Cost of Goods Sold | \( 79,904.88 - X\) | | Manufacturing Margin | \( 125,400 - (79,904.88 - X) \) | | Variable selling and administrative expenses | $10,960 | | Contribution Margin | \( (125,400 - (79,904.88 - X)) - 10,960 \) | | Fixed costs: | | | - Fixed manufacturing costs | $25,233.12 | | - Fixed selling and administrative expenses | $10,520 | | Total Fixed Costs | $35,753.12 | | Operating Income | \( \text{Contribution Margin} - 35,753.12\) |

Please let me know if any additional information is provided or if you want to proceed with assumptions.