ChampionChampion

Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May

20172017

are as follows:

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The selling price per vehicle is

$ 28 comma 000$28,000.

The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is

400400

units. There are no price, efficiency, or spending variances. Anyproduction-volume variance is written off to cost of goods sold in the month in which it occurs.

Read the requirements

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.

	April	May
Unit data:
Beginning inventory	0	150
Production	400	325
Sales	250	425
Variable costs:
Manufacturing cost per unit produced	$12,000	$12,000
Operating (marketing) cost per unit sold	3,800	3,800
Fixed costs:
Manufacturing costs	$2,000,000	$2,000,000
Operating (marketing) costs	725,000	725,000

The selling price per vehicle is

$ 28 comma 000$28,000.

The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is

400400

units. There are no price, efficiency, or spending variances. Anyproduction-volume variance is written off to cost of goods sold in the month in which it occurs.

Prepare April and May

20172017

income statements for

ChampionChampion

Motors under (a) variable costing and (b) absorption costing.

(a) Prepare April and May

20172017

income statements for

ChampionChampion

Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all answer boxes. Enter a "0" for any zero balance accounts.)

April 2017

May 2017