Question
Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow. Variable Costing Income Year 1 Year
Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow.
| Variable Costing Income | Year 1 | Year 2 |
|---|---|---|
| Income | $ 49,000 | $ 670,000 |
Additional Information
- Sales and production data for these first two years follow.
| Units | Year 1 | Year 2 |
|---|---|---|
| Units produced | 50,900 | 50,900 |
| Units sold | 39,000 | 62,800 |
- The companys $31 per unit product cost (for both years) using absorption costing consists of the following.
| Direct materials | $ 5 |
|---|---|
| Direct labor | 9 |
| Variable overhead | 7 |
| Fixed overhead ($490,000/49,000 units) | 10 |
| Total product cost per unit | $ 31 |
Required: Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be certain to enter "0" wherever required.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Management And Cost Accounting
Authors: Colin Drury
5th Edition
1861525362, 978-1861525369
