Chapter 21, Problem P21A.59APGA

To determine

Determination of cost per mealand income statement under absorption and variable costing techniques describes the method of computing the cost per mealand Income Statement under absorption and variable costing techniques. Under Absorption costing, the total cost of manufacturing shall be the variable manufacturing cost and fixed manufacturing overheads. On the basis of total cost of manufacturing, the cost per unit produced shall be computed. Under Variable costing, the total cost of manufacturing shall be considered on the basis of only manufacturing cost (no fixed manufacturing overheads shall be included).The Income Statement shall be prepared under both the methods by valuing the cost of goods sold at the product unit cost evaluated as above.

Thecost per meal and Income Statement under absorption and variable costing need to be determined.