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ale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior ear. These data summarize the current and prior year operations: Sales Production Production cost Factory-variable (per unit) -fixed Marketing-variable Administrative-fixed Prior Year 2,800 units 4,000 units $ 0.60 $2,000 $ $ 0.40 500 Current Year 5,200 units 4,000 units $ 0.60 $ 2,000 $ 0.40 $ 500

ale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior ear. These data summarize the current and prior year operations: Sales Production Production cost Factory-variable (per unit) -fixed Marketing-variable Administrative-fixed Prior Year 2,800 units 4,000 units $ 0.60 $2,000 $ $ 0.40 500 Current Year 5,200 units 4,000 units $ 0.60 $ 2,000 $ 0.40 $ 500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales Production Production cost Factory-variable (per unit) -fixed Marketing-variable Administrative-fixed Prior Year 2,800 units 4,000 units $ 0.60 $2,000 $ 0.40 $ 500 Current Year 5,200 units 4,000 units $ 0.60 $ 2,000 $ 0.40 $ 500 Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.
Transcribed Image Text:Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales Production Production cost Factory-variable (per unit) -fixed Marketing-variable Administrative-fixed Prior Year 2,800 units 4,000 units $ 0.60 $2,000 $ 0.40 $ 500 Current Year 5,200 units 4,000 units $ 0.60 $ 2,000 $ 0.40 $ 500 Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.
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