Refer to the information for Berting Inc. above. Assume that the selling price is $ 16 per unit. The following information pertains to Berting Inc. for last year:
Beginning inventory in units .......... —
Units produced ...................25,000
Units sold ..................23,600
Costs per unit:
Direct materials ................$ 4.00
Direct labor .................$ 1.60
Variable overhead ................$ 0.75
Fixed overhead* ...............$ 3.80
Variable selling expenses .............$ 3.00
Fixed selling and administrative costs ...... $ 24,300
* Fixed overhead totals $ 95,000 per year.
Required:
1. Prepare an income statement using absorption costing.
2. Prepare an income statement using variable costing.