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Can you do all four requirements Game Play manufactures video games that it sells for $45 each. The company uses a fixed manufacturing overhead allocation
Can you do all four requirements
Game Play manufactures video games that it sells for $45 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assure all costs and production levels are exactly as planned. The following data are from Game Play's first two months in business during 2018: (Click the icon to view the data. A Requirements Read the requirements Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing October 2018 Variable Absorption costing costing Total product cost per game 1. Compute the product cost per game produced under absorption costing and under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: a. absorption costing. b. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing, 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. Data Table November Sales October 1,400 units 2,300 units 13 2,600 units 2,300 units Production Print Done $ $ 13 7 7 Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative posts 13,800 13,800 11,500 11,500Step by Step Solution
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