Max Company had the following operating data for its April 2021 operations Variable costs per unit: Direct materials Direct labor Variable overhead P 8.00 4.00 1.50 Fixed costs per year: Overhead 90,000 Selling and administrative 23,450 Max produced 30,000 units for the month and sold 25,000. The selling price per unit was P21. Max uses an actual costing system for product costing. Required: a. Prepare income statements using absorption and variable costing.

Max Company had the following operating data for its April 2021 operations Variable costs per unit: Direct materials Direct labor Variable overhead P 8.00 4.00 1.50 Fixed costs per year: Overhead 90,000 Selling and administrative 23,450 Max produced 30,000 units for the month and sold 25,000. The selling price per unit was P21. Max uses an actual costing system for product costing. Required: a. Prepare income statements using absorption and variable costing.

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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Please solve for B.
Prepare Income statement for the month of December 2020 assuming absorption Costing and Variable Costing and state the reason for difference in income computed between absorption costing and variable costing.
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Compute for the net income under variable costing Without preparing an income statement, determine the absorption costing net operating income for the month.
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Brindle Arts uses Variable Costing for internal purposes, but uses Absorption Costing for their financial reports. The following information is for Quarter 4, 2021 and Quarter 1, 2022. Calculate unit product costs for Quarters 4 and 1 for Variable and Absorption Costing. Prepare an income statement for each method, then show why there is a difference between the two. Selling price per unit $ 150 Quarter 4 Quarter 1 Variable costs per unit Units in beginning inventory - 1,750 Direct materials $ 45.00 Production (in units) 15,000 10,750 Direct labor $ 20.00 Sales (in units) 13,250 12,500 Variable overhead $ 15.00 Ending inventory 1,750 - Variable S&A $ 10.00 Fixed Costs in total per quarter Fixed manufacturing overhead…
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