Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $5.00 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 Projections 57,500 47,900 $ 0.75 $ 0.45 $ 0.35 Total fixed manufacturing overhead Total fixed selling and administrative costs $ 45,425 $ 60,000 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.) 1. Operating income for the first year under full costing 2. Operating income for the first year under variable costing

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $5.00 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
Projections
57,500
47,900
$ 0.75
$ 0.45
$ 0.35
Total fixed manufacturing overhead.
Total fixed selling and administrative costs
$ 45,425
$ 60,000
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.)
1. Operating income for the first year under full costing
2. Operating income for the first year under variable costing
Transcribed Image Text:Start Me Up Incorporated manufactures a caffeinated energy drink that sells for $5.00 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 Projections 57,500 47,900 $ 0.75 $ 0.45 $ 0.35 Total fixed manufacturing overhead. Total fixed selling and administrative costs $ 45,425 $ 60,000 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.) 1. Operating income for the first year under full costing 2. Operating income for the first year under variable costing
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