stella'sFoods produces frozen meals that it sells for$11each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are fromStella'sFoods's first month in business units produced and sold sales 800 meals production 1100 meals $ variable manufacturing of meals 5 sales commission cost per meal 1 total fixed manufacturing overhead 385 total fixed selling and administrative cost 700 REQUIREMENTS Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cents Prepare income statements for January 2018 using: a. absorption costing. b. variable costing. Is operating income higher under absorption costing or variable costing in January?
stella'sFoods produces frozen meals that it sells for$11each. The company computes a new monthly fixed manufacturing
units produced and sold
sales 800 meals
production 1100 meals
$
variable manufacturing of meals 5
sales commission cost per meal 1
total fixed manufacturing overhead 385
total fixed selling and administrative cost 700
REQUIREMENTS
- Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cents
-
Prepare income statements forJanuary2018using:a. absorption costing.b. variable costing.
- Is operating income higher under absorption costing or variable costing in
January?
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