2. B Company produces a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Production: Direct materials P1, 200 1, 400 Direct labor Variable manufacturing overhead Variable selling and administrative 500 200 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Р4, 500, 000 4, 000, 000 During the year, the company produced 10, 000 units. The company has a beginning inventory of 40, 000 and an ending inventory of 5, 000. Required: 1. Prepare an Income Statement using a. Absorption Costing and b. Variable Costing
2. B Company produces a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Production: Direct materials P1, 200 1, 400 Direct labor Variable manufacturing overhead Variable selling and administrative 500 200 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Р4, 500, 000 4, 000, 000 During the year, the company produced 10, 000 units. The company has a beginning inventory of 40, 000 and an ending inventory of 5, 000. Required: 1. Prepare an Income Statement using a. Absorption Costing and b. Variable Costing
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:2. B Company produces a single product. The following costs were incurred during the
company's first year of operations:
Variable costs per unit:
Production:
Direct materials
P1, 200
1, 400
500
200
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
P4, 500, 000
4, 000, 000
During the year, the company produced 10, 000 units. The company has a beginning
inventory of 40, 000 and an ending inventory of 5, 000.
Required:
1. Prepare an Income Statement using a. Absorption Costing and b. Variable Costing
2. Reconcile the income. (Absorption - Variable)
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