Below is an exerpt from the financial data from JasNav Inc. The company has adopted a standard costing system. The following data are for the year ended December 31, 20x3: Inventory, Jan 1, 20x3 100,000 units Inventory, Dec 31, 20x3 35,000 units Sales 350,000 units Selling price $35.00 Variable manufacturing costs 7.00 Variable selling costs 1.50 Fixed manufacturing overhead $1,710,000 Denominator-level direct labour hours 7,500 Standard production rate 40
Below is an exerpt from the financial data from JasNav Inc. The company has adopted a
|
Inventory, Jan 1, 20x3 |
100,000 units |
|
Inventory, Dec 31, 20x3 |
35,000 units |
|
Sales |
350,000 units |
|
Selling price |
$35.00 |
|
Variable |
7.00 |
|
Variable selling costs |
1.50 |
|
Fixed manufacturing |
$1,710,000 |
|
Denominator-level direct labour hours |
7,500 |
|
Standard production rate |
40 units per direct labour hour |
|
Fixed operating expenses |
$1,000,000 |
Required –
Prepare income statements under variable and absorption costing for the year ended December 31, 20x3 and reconcile the two incomes. Assume that the budget costs were the same as the actual costs incurred
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