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9-16 Variable and absorption costing: explaining operating-income differences. TC Motors assembles and sells motor vehicles, and uses standard costing. Actual data relating to April and
9-16 Variable and absorption costing: explaining operating-income differences. TC Motors assembles and sells motor vehicles, and uses standard costing. Actual data relating to April and May 2015 are April May Unit data: Beginning inventory Production Sales 150 400 520 500 350 Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold3,000 Manufacturing costs Operating (marketing) costs S 10,000 S10,000 3,000 S2000,000$2,000,000 Fixed costs s 600,000 S 600,000 The selling price per vehicle is s24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, effici tion-volume variance is written off to cost of goods sold in the month in which it occurs Required ency, or rate variances. Any produc- 1. Prepare April and May 2015 statements of comprehensive income for TC Motors under la) variable costing and (b) absorption costing 2. Prepare a numerical re conciliation and explanation of the difference between operating income for each month under variable costing and absorption costing
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