Question
(16 pts) 5. Strus Corp. manufactures video games that it sells for $40 each. The following data is available for the months of January and
(16 pts) 5. Strus Corp. manufactures video games that it sells for $40 each. The following data is available for the months of January and February.
January February
Sales 2,000 units 3,000 units
Production 2,500 units 2,800 units
Variable manufacturing cost per game* $ 15 $ 15
Sales commission per game $ 5 $ 5
Total fixed manufacturing overhead $ 9,000 $ 9,000
Total fixed marketing and administrative costs $ 8,000 $ 8,000
* Variable manufacturing cost per game includes $9 for direct materials.
a) Determine the unit product cost for each month using the absorption and variable costing approaches.
b) Prepare an income statement for February using the variable costing approach.
c) Prepare an income statement for February using the absorption costing approach.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started