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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company. had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method. Prior Year 3,700 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 Current Year units units 7,900 units 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 units

Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company. had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method. Prior Year 3,700 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 Current Year units units 7,900 units 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 units

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method. Prior Year 3,700 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 Current Year units units 7,900 units 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 units
Transcribed Image Text:Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method. Prior Year 3,700 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 Current Year units units 7,900 units 5,800 $ 0.60 $ 2,900 $ 0.40 $ 500 units
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