Question
During its second month of operations, Texas Corporation produced 300 units and sold 280 units at $40 each. The beginning inventory comprised 50 units, and
During its second month of operations, Texas Corporation produced 300 units and sold 280 units at $40 each. The beginning inventory comprised 50 units, and costs were unchanged from the previous month. Texas uses a LIFO cost flow assumption to account for inventory. Costs incurred during the second month were:
Direct materials per unit produced $3
Direct labor per unit produced $5
Variable overhead per unit produced $7
Variable selling and administrative cost per unit sold $5
Total fixed production overhead $6,000
Total fixed selling and administrative costs $3,000
- Prepare an income statement using the variable costing method.
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