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During the first month of operations ended August 31, Kodiak Fridgeration Company manufac- tured 80,000 mini refrigerators, of which 72,000 were sold. Operating data
During the first month of operations ended August 31, Kodiak Fridgeration Company manufac- tured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: Sales Manufacturing costs: Direct materials..........------------ Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable Fixed Instructions $10,800,000 $6,400,000 1,600,000 1,280,000 320,000 9,600,000 $1,080,000 180,000 1,260,000 1. Prepare an income statement based on the absorption costing concept. 2. Prepare an income statement based on the variable costing concept. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
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