Variable and absorption costing, explaining operating profit differences. (40 minutes) Starzmann, GmbH, assembles and sells motor vehicles. It uses an actual costing system, in which unit costs are calculated on a monthly basis. Data relating to April and May of 1999 are

REQUIRED 1. Present income statements for Starzmann in April and May of 1999 under

(a) variable costing and

(b) absorption costing.
2. Explain any differences between

(a) and

(b) for April and May. mki8

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Unit data Opening stock Production APRIL 0 500 350 Sales Variable-cost data Manufacturing costs per unit produced DM 10,000 Marketing costs per unit sold 3,000 Fixed-cost data Manufacturing costs Marketing costs DM 2,000,000 600,000 The selling price per motor vehicle is DM 24,000. MAY 150 400 520 DM 10,000 3,000 DM 2,000,000 600,000