Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,800 rackets and sold 5,700. Each racket was sold at a price of $98. Fixed overhead costs are $93,840 and fixed year selling and administrative costs are $66,000. The company also reports the following per unit costs for the Variable production costs Variable selling and administrative expensesS 280 $25.80 Required: Prepare an income statement under variable costing ACES INC

Answer and Explanation:

The preparation of an income statement under variable costing is shown below:-

                   Income statement under variable costing

                                        ACES INC

Sales                                                          $558,600

(5,700 × $98)

Less:

Cost of goods sold

Variable product cost            $147,060

($25.80 × 5,700)

variable selling administrative

expenses ($2.80 × 5,700)      $15,950

Less: Total variable cost                       $163,020

Contribution margin                              $395,580

Less: Fixed overhead cost                    $93,840

Less: Fixed and selling

administrative expenses                       $66,000

Net income                                             $235,740

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.