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Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company
produced 1,025 kayaks and sold 775 at a price of $1,025 each. At year-end, the company
reported the following income statement information using absorption costing. Additional
Information a. Product cost per kayak under absorption costing totals $450, which consists of $350
in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost.
Fixed overhead of $100 per unit is based on $102,500 of fixed overhead per year divided by 1,025
kayaks produced. b. The $250,000 in selling and administrative expenses consists of $95,000 that
is variable and $155,000 that is fixed. Prepare an income statement for the current year under
variable costing.

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Kenzi a manufacturer of kayaks began operations this year.pdf

  • 1. Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,025 kayaks and sold 775 at a price of $1,025 each. At year-end, the company reported the following income statement information using absorption costing. Additional Information a. Product cost per kayak under absorption costing totals $450, which consists of $350 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $102,500 of fixed overhead per year divided by 1,025 kayaks produced. b. The $250,000 in selling and administrative expenses consists of $95,000 that is variable and $155,000 that is fixed. Prepare an income statement for the current year under variable costing.