During the most recent year, Bennett Company had the following data:

Required:
1. Calculate the cost of goods sold under variable costing.
2. Prepare an income statement using variable costing.
3. Why are profits different under absorption costing and variable costing?

Transcribed Image Text:

Units in beginning inventory Units produced Units sold ($70 per unit) 8,000 7,500 Variable costs per unit: Direct materials $20 $14 Direct labour Variable overhead Fixed costs: $3 Fixed overhead per unit produced Fixed selling and administrative $5 $142,000