Problem 1. (40%) The EG Company produces and sells one product. The following data refer to the year just completed:Units in beginning inventory ..........................0Units produced................................................8,900Units sold........................................................8,500Units in ending inventory ...............................400Variable costs per unit:Direct materials ...........................................$26Direct labor..................................................$25Variable manufacturing overhead ...............$4Variable selling and administrative expense.................................................................$4Fixed costs:Fixed manufacturing overhead ....................$249,200Fixed selling and administrative expense....$17,000Sales Price is $100 per unit.Required: b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing.d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
Problem 1. (40%) The EG Company produces and sells one product. The following data refer to the year just completed:Units in beginning inventory ..........................0Units produced................................................8,900Units sold........................................................8,500Units in ending inventory ...............................400Variable costs per unit:Direct materials ...........................................$26Direct labor..................................................$25Variable manufacturing
b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing.d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
Step by step
Solved in 2 steps
