Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.
Great Outdoze Company manufactures sleeping bags, which sell for $65.30 each. The variable costs of production are as follows: Direct material Direct labor $ 19.00 10.30 7.10 Variable manufacturing
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