Mario's Foods produces frozen meals, which it sells for $8 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rat based on the actual number of meals produced that month. All costs and production levels ae exactly as planned. The following data are from the company's first two months in business February January 1,400 meals 1,800 meis Sales Production 2,000 meals 1,400 meas $ 4 $ 2 $ 700 $ 500 $ 4 Variable manufacturing expense per meal Sales commission expense per meal Total fixed manufacturing overhead Total fixed marketing and administrative expenses.... $ 2 **... $ 700 $ 500 Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. 2. Prepare separate monthly income statements for January and for February, using u following . Absorption costing b. Variable costing
Mario's Foods produces frozen meals, which it sells for $8 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rat based on the actual number of meals produced that month. All costs and production levels ae exactly as planned. The following data are from the company's first two months in business February January 1,400 meals 1,800 meis Sales Production 2,000 meals 1,400 meas $ 4 $ 2 $ 700 $ 500 $ 4 Variable manufacturing expense per meal Sales commission expense per meal Total fixed manufacturing overhead Total fixed marketing and administrative expenses.... $ 2 **... $ 700 $ 500 Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. 2. Prepare separate monthly income statements for January and for February, using u following . Absorption costing b. Variable costing
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![P6-66A Absorption and variable costing income statements
(9 anpalgo buueo
Mario's Foods produces frazen meals, which it sells for $8 each. The company uses the FIFO
inventory costing method, and it computes a new monthly fixed manufacturing overhead rate
based on the actual number of meals produced that month. All costs and production levels are
exactly as planned. The following data are from the company's first two months in business:
January
kenuqa
1,400 meals
Sales
1,400 meas
$ 4
Production
2,000 meals
Variable manufacturing expense per meal
Sales commission expense per meal
$ 2
$ 2
Total fixed manufacturing overhead .
Total fixed marketing and administrative expenses ....
00L S
00S $
00S $
Requirements
1. Compute the product cost per meal produced under absorption costing and unde
variable costing. Do this first for January and then for February.
2. Prepare separate monthly income statements for January and for February, using u
following
a. Absorption costing
b. Variable costing
February? Explain the pattern of differences in operating income based on
costing versus variable costing.
absorption](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5220398-a02a-4f8e-ab05-55b2d65ddb3b%2F7bde2a9f-610b-4516-a1b7-e6f9f2bcd8d3%2Fo5e3y5i.jpeg&w=3840&q=75)
Transcribed Image Text:P6-66A Absorption and variable costing income statements
(9 anpalgo buueo
Mario's Foods produces frazen meals, which it sells for $8 each. The company uses the FIFO
inventory costing method, and it computes a new monthly fixed manufacturing overhead rate
based on the actual number of meals produced that month. All costs and production levels are
exactly as planned. The following data are from the company's first two months in business:
January
kenuqa
1,400 meals
Sales
1,400 meas
$ 4
Production
2,000 meals
Variable manufacturing expense per meal
Sales commission expense per meal
$ 2
$ 2
Total fixed manufacturing overhead .
Total fixed marketing and administrative expenses ....
00L S
00S $
00S $
Requirements
1. Compute the product cost per meal produced under absorption costing and unde
variable costing. Do this first for January and then for February.
2. Prepare separate monthly income statements for January and for February, using u
following
a. Absorption costing
b. Variable costing
February? Explain the pattern of differences in operating income based on
costing versus variable costing.
absorption
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