E9-21

FastTrack Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to Data Table

	April	May
Unit data:
Beginning inventory	0	50
Production	400	375
Sales	350	400
Variable costs:
Manufacturing cost per unit produced	$9,500	$9,500
Operating (marketing) cost per unit sold	2,600	2,600
Fixed costs:
Manufacturing costs	$2,200,000	$2,200,000
Operating (marketing) costs	725,000	725,000

April and May 2017 are as follows:

The selling price per vehicle is $ 29, 000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 400 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

Requirements

1.	Prepare April and May 2017 income statements for FastTrack Motors under(a) variable costing and (b) absorption costing.
2.	Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing.

Requirement 1. Prepare April and May 2017 income statements for FastTrack Motors under (a) variable costing and (b) absorption costing. (a) Prepare April and May 2017 income statements for FastTrack 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.)

Create income statement for April and May side by side.