Prepare income statement using the contribution approach
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Company has been producing and selling 100,000 per year year. They have excess capacity.
Selling price per unit $12.50
Variable cost per unit
Direct materials $5.00
Direct labor $3.00
Overhead $1.00
Selling and administrative $0.25
Fixed costs in total:
Overhead $80,000.00
Selling and administrative $35,000.00
a. Prepare income statement using the contribution approach
b. Prepare an income statement using the absorption approach
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a. Prepare income statement using the contribution approach
Sales $1,250,000.00
Total variable costs
Direct materials $500,000.00
Direct ...
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