Information for Asian Windows is given in E8-17.

Instructions
(a) Assume the company uses normal costing and uses the budgeted volume of 8,000 units to allocate the fixed overhead rate rather than the actual production volume of 10,000 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. Do the following:
1. Calculate the manufacturing cost per unit.
2. Prepare a normal-costing income statement for 2016.
(b) Reconcile the difference in net income between the absorption-costing and normal-costing methods.

Transcribed Image Text:

Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative expenses Fixed selling and administrative expenses Selling price Units produced Units sold $40 per shade $9 per shade $90 per shade $100,000 $250,000 10,000 shades 8,500 shades