The following data were taken from the records of C5 Drinks Company for the years ending Year 1 and Year 2 Year 1 Year 2 In units Inventory, beginning 0 7,000 Production 20,000 18,000 Available for sale 20,000 25,000 Units sold 13,000 23,000 Inventory ending 7,000 2,000 Sales (P20 per unit) P260,000 P460,000 Variable manufacturing cost (P7.50 per unit) 150,000 135,000 Fixed manufacturing costs 50,000 54,000 Selling and administrative (60% fixed, 40% variable) 45,000 75,000 Instructions: Determine the net income under absorption costing Year 1 and Year 2. Determine the net income under variable costing for Year 1 and Year 2. Determine the cause of the difference in the two net incomes in Year 1 and Year 2.
3.9
The following data were taken from the records of C5 Drinks Company for the years ending Year 1 and Year 2
Year 1 Year 2
In units
Inventory, beginning 0 7,000
Production 20,000 18,000
Available for sale 20,000 25,000
Units sold 13,000 23,000
Inventory ending 7,000 2,000
Sales (P20 per unit) P260,000 P460,000
Variable manufacturing cost (P7.50 per unit) 150,000 135,000
Fixed
Selling and administrative (60% fixed, 40% variable) 45,000 75,000
Instructions:
- Determine the net income under absorption costing Year 1 and Year 2.
- Determine the net income under variable costing for Year 1 and Year 2.
- Determine the cause of the difference in the two net incomes in Year 1 and Year 2.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
