Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit $ 310 per unit Units produced this year 105,000 units Units sold this year 108,750 units Units in beginning-year inventory 3,750 units Beginning inventory costs Variable (3,750 units × $135) $ 506,250 Fixed (3,750 units × $75) 281,250 total $ 787,500 Manufacturing costs this year Direct materials $ 44 per unit Direct labor $ 70 per unit Overhead costs this year Variable overhead $ 3,400,000 Fixed overhead $ 7,200,000 Selling and administrative costs this year Variable $ 1,300,000 Fixed 4,200,000 1. Prepare the current-year income statement for the company using variable costing. 2. Prepare the current-year income statement for the company using absorption costing. 3. Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units × fixed overhead per unit.
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Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.
Sales price per unit $ 310 per unit
Units produced this year 105,000 units
Units sold this year 108,750 units
Units in beginning-year inventory 3,750 units
Beginning inventory costs
Variable (3,750 units × $135) $ 506,250
Fixed (3,750 units × $75) 281,250
total $ 787,500
Direct materials $ 44 per unit
Direct labor $ 70 per unit
Variable overhead $ 3,400,000
Fixed overhead $ 7,200,000
Selling and administrative costs this year
Variable $ 1,300,000
Fixed 4,200,000
1. Prepare the current-year income statement for the company using variable costing.
2. Prepare the current-year income statement for the company using absorption costing.
3. Fill in the blanks:
The dollar difference in variable costing income and absorption costing income = units × fixed overhead per unit.
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