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Angie Motors assembles and sells motor vehicles and uses standard costing. Actual data related to April and May 2017 are as follows: Unit data: June
Angie Motors assembles and sells motor vehicles and uses standard costing. Actual data related to April and May 2017 are as follows: Unit data: June July Beginning inventory 0 200 Production 1,000 900 Sales 800 1,050 Variable costs: Manufacturing cost per unit produced 9,000 9,000 Marketing cost per unit sold 4,000 4,000 Fixed costs: Manufacturing costs 2,200,000 2,200,000 Marketing costs 500,000 500,000 The selling price per vehicle is $18,000. The budgeted level of production used to calculate the budgeted fixed manu- facturing cost per unit is 1,000 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Required 1. Prepare income statements for each month using absorption costing (Spts) 2. Prepare income statements for each month using variable costing (Spts) 3. Explain why the income was different each year using the two methods. Show computations (6pts)
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