Gorimapa Manufacturing Company produces desktop calendars. The following are the budgeted data for 3,000 units of Joystick produced in September 2020:

Required

During the period 2,800 were produced and sold to customers.
1. Prepare income statement for the year ending September 30, 2020 using:
a. Variable costing technique
b. Absorption costing technique
2. Explain the reasons for the difference in the profit in the two approaches.

Transcribed Image Text:

Selling price Direct material Direct labor Variable production overhead Fixed production overhead Selling and distribution expenses £ 450 120 80 65 70 15