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The information below representsthe beginning and ending inventory amounts along with theproduction and sales for the month in umbrella units

Beginning Inventory: 0 Umbrellas

Production: 80,000 Umbrellas

Sales: 60,000 Umbrellas

Ending Inventory: 20,000 Umbrellas

The Hampshire Company manufactures umbrellas that sell for$12.50 each. In 2014, the company made and sold 60,000 umbrellas.The company had fixed manufacturing costs of $216,000. It also hadfixed costs for administration of $79,525. The per-unit costs ofeach umbrella are as follows:

Using the information

Prepare a variable costing income statement.

Prepare an absorption costing income statement.

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead:$0.40

Variable Selling Expenses: $1.10

Requirement 1
Hampshire Company
Variable Costing IncomeStatement
Units $
Sales X $ $
Variable Cost of Goods Sold:
Beginning Inventory $
Direct Materials X $ $
Direct Labor X $ $
Manufacturing Overhead X $ $
Total Variable Costs $
Cost of Good Available for Sale $
Deduct Ending Inventory X $ $
Variable Costs of GoodsSold $
Variable Selling Costs X $ $ $
Contribution Margin $
Fixed Costs:
Fixed Manufacturing Costs $
Fixed Administrative Costs $
Operating Income $
Requirement 2
Hampshire Company
Absorption Costing IncomeStatement
Units $
Sales X $ $
Variable Cost of Goods Sold:
Beginning Inventory $
Direct Materials X $ $
Direct Labor X $ $
Manufacturing Overhead X $ $
Total Variable Costs $
Allocated Fixed Manufacturing Costs X $ $
Cost of Good Available for Sale $
Deduct Ending Inventory X $ $
Costs of GoodsSold $
Gross Margin $
Fixed Costs:
Variable Selling Costs X $ $
Fixed Administrative Costs $
Operating Income $

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Irving Heathcote
Irving HeathcoteLv2
28 Sep 2019
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