Exercise 19-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Skip to question [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $120 per unit. Direct materials $ 48 per unit Direct labor $ 18 per unit Variable overhead $ 6 per unit Fixed overhead $ 420,000 per year Variable selling and administrative expenses $ 12 per unit Fixed selling and administrative expenses $ 110,000 per year Exercise 19-3 (Algo) 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. 2a. Assume the company uses variable costing. Determine its total product cost per unit. 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
Exercise 19-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Skip to question [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $120 per unit. Direct materials $ 48 per unit Direct labor $ 18 per unit Variable overhead $ 6 per unit Fixed overhead $ 420,000 per year Variable selling and administrative expenses $ 12 per unit Fixed selling and administrative expenses $ 110,000 per year Exercise 19-3 (Algo) 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. 2a. Assume the company uses variable costing. Determine its total product cost per unit. 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Exercise 19-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2
Skip to question
[The following information applies to the questions displayed below.]
Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $120 per unit.
| Direct materials | $ 48 | per unit |
|---|---|---|
| Direct labor | $ 18 | per unit |
| Variable |
$ 6 | per unit |
| Fixed overhead | $ 420,000 | per year |
| Variable selling and administrative expenses | $ 12 | per unit |
| Fixed selling and administrative expenses | $ 110,000 | per year |
Exercise 19-3 (Algo)
1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.
2a. Assume the company uses variable costing. Determine its total product cost per unit.
2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
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