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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.. $320 per unit Manufacturing costs this year Units produced this year Units sold this year.... 15,000 units Direct materials.. $40 per unit 18,000 units Direct labor..... $62 per unit Units in beginning-year inventory 3,000 units Overhead costs this year Variable overhead.. $3,220,000 Beginning inventory costs Variable (3,000 units x $135)... Fixed (3,000 units x $80) $405,000 Fixed overhead... $7,400,000 Selling and administrative costs this year 240,000 $645,000 Total Variable .. $1,416,000 Fixed ... 4,600,000 - Frepare the current-year income statement for the company using variable costing. * Frepare the current-year income statement for the company using absorption costing. * Explain any difference between the two income numbers under the two costing methods in parts 1 and 2.

Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit.. $320 per unit Manufacturing costs this year Units produced this year Units sold this year.... 15,000 units Direct materials.. $40 per unit 18,000 units Direct labor..... $62 per unit Units in beginning-year inventory 3,000 units Overhead costs this year Variable overhead.. $3,220,000 Beginning inventory costs Variable (3,000 units x $135)... Fixed (3,000 units x $80) $405,000 Fixed overhead... $7,400,000 Selling and administrative costs this year 240,000 $645,000 Total Variable .. $1,416,000 Fixed ... 4,600,000 - Frepare the current-year income statement for the company using variable costing. * Frepare the current-year income statement for the company using absorption costing. * Explain any difference between the two income numbers under the two costing methods in parts 1 and 2.

FINANCIAL ACCOUNTING
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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Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit.. $320 per unit Manufacturing costs this year Units produced this year Units sold this year.... 15,000 units Direct materials.. $40 per unit 18,000 units Direct labor..... $62 per unit Units in beginning-year inventory 3,000 units Overhead costs this year Variable overhead.. $3,220,000 Beginning inventory costs Variable (3,000 units x $135)... Fixed (3,000 units x $80) $405,000 Fixed overhead... $7,400,000 Selling and administrative costs this year 240,000 $645,000 Total Variable .. $1,416,000 Fixed ... 4,600,000 - Frepare the current-year income statement for the company using variable costing. * Frepare the current-year income statement for the company using absorption costing. * Explain any difference between the two income numbers under the two costing methods in parts 1 and 2.
Transcribed Image Text:Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit.. $320 per unit Manufacturing costs this year Units produced this year Units sold this year.... 15,000 units Direct materials.. $40 per unit 18,000 units Direct labor..... $62 per unit Units in beginning-year inventory 3,000 units Overhead costs this year Variable overhead.. $3,220,000 Beginning inventory costs Variable (3,000 units x $135)... Fixed (3,000 units x $80) $405,000 Fixed overhead... $7,400,000 Selling and administrative costs this year 240,000 $645,000 Total Variable .. $1,416,000 Fixed ... 4,600,000 - Frepare the current-year income statement for the company using variable costing. * Frepare the current-year income statement for the company using absorption costing. * Explain any difference between the two income numbers under the two costing methods in parts 1 and 2.
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