Question
April May Unit data Beginning inventory 0 150 Production 600 500 Sales 450 600 Variable costs Manufacturing cost per unit produced $10,000 $10,000 Operating (marketing)
April | May | |
Unit data | ||
Beginning inventory | 0 | 150 |
Production | 600 | 500 |
Sales | 450 | 600 |
Variable costs | ||
Manufacturing cost per unit produced | $10,000 | $10,000 |
Operating (marketing) cost per unit sold | 4,000 | 4,000 |
Fixed costs | ||
Manufacturing costs | $2,400,000 | $2,400,000 |
Operating (marketing) costs | 500,000 | 500,000 |
The selling price per vehicle is
$29,000.
The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is
600
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.
Requirements
1. | Prepare April and May 2014 income statements forFastRideFastRide Motors under (a) variable costing and (b) absorption costing. |
2. | Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. |
Requirement 1. Prepare April and May
2014
income statements for
FastRideFastRide
Motors under (a) variable costing and (b) absorption costing.(a) Prepare April and May
2014
income statements for
FastRideFastRide
Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Enter a "0" for any zero balance accounts.)
+ | ||||
Copy to Clipboard... |
|
|
| April |
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