Using variable costing and absorption costing The chief executive officer of Acadia, Inc. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Acadia, Inc. be used to prepare comparative statements using variable costing and the company’s absorption costing. The data follow: Direct materials $99,000 Direct labor 126,000 Variable factory overhead 72,000 Fixed factory overhead 171,000 Fixed marketing and administrative expense 211,500 The factory produced 90,000 units during the period, and 78,750units were sold for $787,500. 1.Prepare an income statement using variable costing. 2.Prepare an income statement using absorption costing.(Round unit costs to three decimal places.)
E10-3Using variable costing and absorption costing
The chief executive officer of Acadia, Inc. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Acadia, Inc. be used to prepare comparative statements using variable costing and the company’s absorption costing. The data follow:
Direct materials $99,000
Direct labor 126,000
Variable factory
Fixed factory overhead 171,000
Fixed marketing and administrative expense 211,500
The factory produced 90,000 units during the period, and 78,750units were sold for $787,500.
1.Prepare an income statement using variable costing.
2.Prepare an income statement using absorption costing.(Round unit costs to three decimal places.)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
