Cool Ride

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

2020 are as follows:

1. Prepare income statements for Cool Ride Motors in April and May 2020 under throughput costing. 2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented. 3. Give one motivation for Cool Ride Motors to adopt throughput costing. \begin{tabular}{|c|l|c|c|} \hline & \multicolumn{1}{|c|}{ A } & \multicolumn{1}{c|}{ B } & C \\ \hline 1 & & \multicolumn{1}{c|}{ April } & May \\ \hline 12 & Direct material cost per unit & $6,900 & $6,900 \\ \hline 13 & Direct manufacturing labor cost per unit & 1,300 & 1,300 \\ \hline 14 & Manufacturing overhead cost per unit & 3,800 & 3,800 \\ \hline \end{tabular} Operating costs: Variable operating costs Fixed operating costs Data table 1. Prepare income statements for Cool Ride Motors in April and May 2020 under throughput costing. 2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented. 3. Give one motivation for Cool Ride Motors to adopt throughput costing. \begin{tabular}{|c|l|c|c|} \hline & \multicolumn{1}{|c|}{ A } & \multicolumn{1}{c|}{ B } & C \\ \hline 1 & & \multicolumn{1}{c|}{ April } & May \\ \hline 12 & Direct material cost per unit & $6,900 & $6,900 \\ \hline 13 & Direct manufacturing labor cost per unit & 1,300 & 1,300 \\ \hline 14 & Manufacturing overhead cost per unit & 3,800 & 3,800 \\ \hline \end{tabular} Operating costs: Variable operating costs Fixed operating costs Data table