Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs 0 1,300 1,150 $850 $650 $533.000 150 1,250 1,250 $850 $650 150 1,375 1,380 $850 $650 $533.000 $533.000
Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs 0 1,300 1,150 $850 $650 $533.000 150 1,250 1,250 $850 $650 150 1,375 1,380 $850 $650 $533.000 $533.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
N3.
Account
Transcribed Image Text:Amazing Screen Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data
relating to January, February, and March 2020 are as follows:
Unit data:
Beginning inventory
Production
Sales
Variable costs:
Manufacturing cost per unit produced
Operating (marketing) cost per unit sold
Fixed costs:
Manufacturing costs
1.
January
2.
0
1,300
1,150
$850
$650
$533,000
February
$200,000
150
1,250
1,250
$850
$650
$533,000
March
150
1,375
1,380
$850
Operating (marketing) costs
The selling price per unit is $2,300.The budgeted level of production used to calculate the budgeted fixed manufacturing
cost per unit is 1,300 units. There are no price, efficiency, or spending variances. Any production-volume variance is
written off to cost of goods sold in the month in which it occurs.
Requirements:
$650
$533,000
$200,000 $200,000
Prepare income statements for Amazing Screen in January, February, and March 2020
under (a) variable costing and (b) absorption costing.
Explain the difference in operating income for January, February, and March under variable costing and
absorption costing.
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