Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $4.30 each. The results for its first year of operations appear in the table below: Number of drinks produced Number of drinks sold Direct materials per drink Direct labor per drink Variable manufacturing overhead per drink Total fixed manufacturing overhead Total fixed selling and administrative costs Projections 54,000 47,200 $0.68 $ 0.38 $ 0.28 $ 38,880 $ 56,500 Required: 1. Compute the operating income for the first year under full costing. 2. Compute the operating income for the first year under variable costing. (For all requirements, do not round intermediate calculations.)
Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $4.30 each. The results for its first year of operations appear in the table below: Number of drinks produced Number of drinks sold Direct materials per drink Direct labor per drink Variable manufacturing overhead per drink Total fixed manufacturing overhead Total fixed selling and administrative costs Projections 54,000 47,200 $0.68 $ 0.38 $ 0.28 $ 38,880 $ 56,500 Required: 1. Compute the operating income for the first year under full costing. 2. Compute the operating income for the first year under variable costing. (For all requirements, do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $4.30 each. The
results for its first year of operations appear in the table below:
Number of drinks produced
Number of drinks sold
Direct materials per drink
Direct labor per drink
Variable manufacturing overhead per drink
Total fixed manufacturing overhead
Total fixed selling and administrative costs
Projections
54,000
47,200
$ 0.68
$ 0.38
$ 0.28
1. Operating income for the first year under full costing
2. Operating income for the first year under variable costing
$ 38,880
$ 56,500
Required:
1. Compute the operating income for the first year under full costing.
2. Compute the operating income for the first year under variable costing.
(For all requirements, do not round intermediate calculations.)
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