ch 21 pt 3

Instructions During the first month of operations ended May 31 Bosky Creation Company produced 40.000 designer cowboy boots, of which 36.000 were sold Opening data for the month are summarized as follows $4.500.000,00 Sales Manufacturing costs Duet materials 4 5910,000.00 2,000,000.00 520,000.00 120,000.00 3 Direct labor Variable manufacturing cost Fixed manufacturing Cost Selling and administrative expenses Variable 3.600,000.00 572,000.00 80,000.00 152,000.00 Fixed During June, Big Sky Creations produced 32,000 designer cowboy boots and sold 36,000 cowboy boots. Operating data for June we summarised as follows: 54,500,000.00 1 Sales Manufacturing costs Direct materials 3 $7,680,000.00 1,600,000.00 4 Direct labor During June, Big Sky Creations produod 32.000 designer cowboy boots and sold 36.000 cowboy boots Operating data for June are summanod as follows Sales 54500,000.00 Manufacturing costs Direct materials Direct labor 57,630,000.00 1,600,000.00 416,000.00 120,000.00 3 2.904.000.00 Variable manufacturing cost Fixed manufacturing cost 7 Selling and administrative expenses $22,000.00 Variable 80,000.00 152.000.00 Fixed Required: 1. Using the absorption costing concept prepare income statements for (a) May and (b) June 2. Using the variable costing concept prepare income statements for (a) May and (b) June 3a. Explain the reason for the differences in operating income in (1) and (2) for May 36. Explain the reason for the differences in operating income in (1) and (2) for June 4. Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June? Explain "Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Entor amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Ner loss should be negative, Absorption Costing Income Statement-May 1a. Using the absorption costing concept, prepare income statements for May. Be sure to complete the statement reading. Peter to the best of Label and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as pontive numbers unless the amount is a calculation that results in a negative amount. For example: Not loss should be negative Big Sky Creations Company Absorption Costing Income Statement Label 1 2 (Label) 3 4 5 6 7 3 Absorption Costing Income Statement-June 16. Using the absorption costing concept, propare income statements for June. Be sure to complete the statement heading Refer to the ist of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (;) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative Big Sky Creations Company Absorption Costing Income Statement Label 1 2 Label) 5 4 5 6 7 3 oBook 4 Show Me How Variable Costing Income Statemen-May 2. Using the variable costing concept prepare income statements for May Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount For example Netloss should be negative Big Sky Creations Company Variable Costing Income Statement bel 1 3 Label 1 4 3 2 (Label) 10 11 12 13 Previou Check My Work Save and Exit Submit Assignment 2b. Using the variable costing concept prepare income statements for June. Be sure to complete the statement heading Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Nerloss should be negative Big Sky Creations Company Variable Costing Income Statement Label 1 2 (Label 3 4 5 6 7 Label) 10 11 12 13 3a. Explain the reason for the differences in operating income in (1) and (2) for May costing income statement For May, operating income reported under costing exceeds that reported under costing due to part of manutacturing costs that are expensed on the costing income statement, but not on the 36. Explain the reason for the differences in operating income in (t) and (2) for June costing Income For June, operating income reported under costing is less than that reported under costing due to part of manufacturing costs from May that are expended on the costing income statement but not on the statement 4. Based on your answers to (1) and (2) did Big Sky Creation Company operate more profitably in May or in June? Explain under the variable costing concept. The difference in operating income reported under to the Big Sky Creations Company was the absorption costing concept is due to allocating