For the year, the following data are available:Budgeted productionActual production36,000 units30,000 units28,000 unitsP1,000SalesFinished goods inventory, January 1Unfavorable variances from standardvariable manufacturing costsP5,000All variances are written off directly at year-end as an adjustment to Cost ofGoods Sold.Required:1. Prepare the income statement under the direct costing method.2. Prepare the income statement under the absorption costing method. Problem 2The Honey Company is comparing its present absorption costing practiceswith direct costing methods. An examination of its records produced thefollowing information:Maximum plant capacityNormal capacityFixed factory overheadFixed marketing and administrative expenseSales price per unitStandard variable manufacturing cost per unitVariable marketing expense per unit sold40,000 units36,000 unitsP54,000P20,00010P1

Name: For the year, the following data are available:Budgeted productionAct
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Description: For the year, the following data are available:Budgeted productionActual production36,000 units30,000 units28,000 unitsP1,000SalesFinished goods inventory, January 1Unfavorable variances from standardvariable manufacturing costsP5,000All variances a

Under Direct costing method, the fixed production costs are treated as period cost and not included…

Business

Accounting

For the year, the following data are available: Budgeted production Actual production Sales Finished goods inventory, January 1 Unfavorable variances from standard variable manufacturing costs 36,000 units 30,000 units 28,000 units P1,000 P5,000 All variances are written off directly at year-end as an adjustment to Cost of Goods Sold. Required: 1. Prepare the income statement under the direct costing method. 2. Prepare the income statement under the absorption costing method.

For the year, the following data are available: Budgeted production Actual production Sales Finished goods inventory, January 1 Unfavorable variances from standard variable manufacturing costs 36,000 units 30,000 units 28,000 units P1,000 P5,000 All variances are written off directly at year-end as an adjustment to Cost of Goods Sold. Required: 1. Prepare the income statement under the direct costing method. 2. Prepare the income statement under the absorption costing method.

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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