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Basketball Products has the following cost information available for 2013: Direct materials $5.00 per unit Direct labor $4.00 per unit Variable manufacturing overhead $3.00 per
Basketball Products has the following cost information available for 2013:
Direct materials | $5.00 per unit |
Direct labor | $4.00 per unit |
Variable manufacturing overhead | $3.00 per unit |
Variable selling and administrative costs | $2.00 per unit |
Fixed manufacturing overhead | $21,000 |
Fixed selling and administrative costs | $5,000 |
During 2013, Basketball produced 2,000 units out of which 1,500 units were sold for $50 each. Required:
A. | Present a contribution format income statement using variable costing. |
B. C. | Present a multi-step income statement assuming the company uses absorption costing. Why is net income under these methods different? |
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