Question
2. In 2020, ABC Company produces a single product with the following information: Variable cost per unit: SR Direct martial PER UNIT 8 Direct labor
2. In 2020, ABC Company produces a single product with the following information:
| Variable cost per unit: | SR |
| Direct martial PER UNIT | 8 |
| Direct labor per unit | 10 |
| Manufacturing over head | 5 |
| Variable selling expense per units sold | 2 |
| Additional information: | SR |
| Fixed manufacturing costs per year | 150,000 |
| Fixed selling and administrating expenses per year | 150,000 |
| Number of units produced | 20,000 |
| Selling price per unit | 50 |
Required:
- Prepare income statement using absorption costing and variable costing assuming all 20,000 units sold.
- Prepare income statement using absorption costing and variable costing assuming all 15,000 units sold and 5,000 units unsold.
- Comment on results explaining which costing method produces more profit in case of inventory.
Answer:
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The Internal Auditing Pocket Guide Preparing Performing Reporting And Follow Up
Authors: J.P. Russell
2nd Edition
1636941303, 978-1636941301
