4.Genco Inc. makes a single product that sells for $50. The standard variable manufacturing cost is $32.50 and the standard fixed manufacturing cost is $7.50, based on producing 20,000 units. During the year Genco produced 22,000 units and sold 21,000 units. Actual fixed manufacturing costs were $157,000; actual variable manufacturing costs were $735,000. Selling and administrative expenses, all fixed, were $75,000. There were no beginning inventories.

a.Prepare a standard absorption costing income statement.

b.Prepare a standard variable costing income statement.

5.Brahms Corp. has the following data:

Normal capacity 25,000

Practical capacity 30,000

Budgeted production 20,000

Actual production 22,000

Actual sales ($25 per unit) 21,000

Standard variable production cost per unit $15

Budgeted fixed production costs $120,000

There were no variable cost variances for the year. Fixed costs incurred were equal to the budgeted amount. There were no beginning inventories and no selling or administrative expenses.

a.Compute the absorption costing income if fixed costs per unit are determined using normal capacity.

b.Compute the absorption costing income if fixed costs per unit are determined using practical capacity.

c.Compute the absorption costing income if fixed costs per unit are determined using budgeted production.

d.Compute the variable costing income.