Berti Corporation manufactures and sells a single product. Cost data for the product are given below: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative. Total fixed cost per month $15 2.0 5 6 $46 $900,000 200,000 $1.100.000 The product sells for $150 per unit. Production and sales data for September follow: There was no beginning inventory. Units Produced 30,000 Required: a) Determine the unit product cost under: • Absorption costing Variable costing Units Sold 22,000 b) Prepare a variable costing income statement for September. c) Prepare an absorption costing income statement for September. d) Explain why the operating income is different in parts (a) and (b).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Berti Corporation manufactures and sells a single product. Cost data for the
product are given below:
Variable costs per unit:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Total variable cost per unit
Fixed costs per month:
Fixed manufacturing overhead
Fixed selling and administrative_
Total fixed cost per month
$15
20
5
6
$46
$900,000
200,000
$1.100.000
The product sells for $150 per unit. Production and sales data for September
follow:
There was no beginning inventory.
Units
Produced
30,000
Required:
a) Determine the unit product cost under:
Absorption costing
Variable costing
Units
Sold
22,000
b) Prepare a variable costing income statement for September.
c) Prepare an absorption costing income statement for September.
d) Explain why the operating income is different in parts (a) and (b).
Transcribed Image Text:Berti Corporation manufactures and sells a single product. Cost data for the product are given below: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative_ Total fixed cost per month $15 20 5 6 $46 $900,000 200,000 $1.100.000 The product sells for $150 per unit. Production and sales data for September follow: There was no beginning inventory. Units Produced 30,000 Required: a) Determine the unit product cost under: Absorption costing Variable costing Units Sold 22,000 b) Prepare a variable costing income statement for September. c) Prepare an absorption costing income statement for September. d) Explain why the operating income is different in parts (a) and (b).
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