Rey Company’s only product sells for $222 per unit. Data for its first year of operations follow. Direct materials $ 26 per unit Direct labor $ 34 per unit Variable overhead $ 12 per unit Fixed overhead $ 364,000 per year Variable selling and administrative expenses $ 24 per unit Fixed selling and administrative expenses $ 212,000 per year Units produced and sold 26,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.
Rey Company’s only product sells for $222 per unit. Data for its first year of operations follow. Direct materials $ 26 per unit Direct labor $ 34 per unit Variable overhead $ 12 per unit Fixed overhead $ 364,000 per year Variable selling and administrative expenses $ 24 per unit Fixed selling and administrative expenses $ 212,000 per year Units produced and sold 26,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Rey Company’s only product sells for $222 per unit. Data for its first year of operations follow.
Direct materials | $ 26 | per unit |
---|---|---|
Direct labor | $ 34 | per unit |
Variable |
$ 12 | per unit |
Fixed overhead | $ 364,000 | per year |
Variable selling and administrative expenses | $ 24 | per unit |
Fixed selling and administrative expenses | $ 212,000 | per year |
Units produced and sold | 26,000 | units |
1. Prepare an income statement for the year using absorption costing
2. Prepare an income statement for the year using variable costing.
![REY COMPANY
Income Statement (Absorption Costing)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F546860fe-98c5-4cbb-83c9-6bb3ac138cc4%2F7089becc-e16d-4742-ab6c-281d77847a1c%2Foalr0rg_processed.png&w=3840&q=75)
Transcribed Image Text:REY COMPANY
Income Statement (Absorption Costing)
![Income
REY COMPANY
Income Statement (Variable Costing)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F546860fe-98c5-4cbb-83c9-6bb3ac138cc4%2F7089becc-e16d-4742-ab6c-281d77847a1c%2Fawl0xp9_processed.png&w=3840&q=75)
Transcribed Image Text:Income
REY COMPANY
Income Statement (Variable Costing)
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