Accounts CVP Analysis : Preparation of absorption Costing

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					              Sub: Accounts                                          Topic: CVP Analysis, Absorption Costing

              Question:
              Income statement preparation using contribution and Absorption Costing
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              Straightforward Income Statements

              The Independence Company had the following manufacturing data for the year 2006 (in

              thousands of dollars).

              Beginning and ending inventories none

              Direct material used $400

              Direct labor 330

              Supplies 20

              Utilities—variable portion 40

              Utilities—fixed portion 12

              Indirect labor—variable portion 90

              Indirect labor—fixed portion 40

              Depreciation 200

              Property taxes 20

              Supervisory salaries 50


              Selling expenses were $300,000 (including $60,000 that were variable) and general

              administrative expenses were $144,000 (including $23,000 that were variable). Sales were $1.8

              million.
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Description: Income statement preparation using contribution and Absorption Costing : The Independence Company had the following manufacturing data for the year 2006 (in thousands of dollars).
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