=+ Manufacturing cost per unit produced 10 000 $ 10 000 Operating (marketing) cost per unit sold 3 000 3 000 Fixed costs Manufacturing costs $2 000 000 $2 000 000 Operating (marketing) costs 600 000 600 000

$

The selling price per vehicle is $24000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency or spending variances. Any production volume variance is written off to cost of goods sold in the month in which it occurs.

Required 1 Prepare April and May 2015 income statements for V8 Motors under:

(a) variable costing, and

(b) absorption costing.