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Example-1 Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January,

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Example-1 Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: January February March Unit data: Beginning inventory 0 150 150 Production 1.500 1.400 1.520 Sales 1,350 1,400 1,530 Variable costs: Manufacturing cost per unit produced $ 1,000 s 1,000 1,000 Operating (marketing) cost per unit $ S 800 S sold 800 Fixed costs: Manufacturing costs $525,000 $525,000 $525.000 Operating (marketing) costs $130,000 $130,000 $130,000 I The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1.500 units. There are no price, eficiency, or spending variances. Any production-volume variance is written oll to cost of goods sold in the month in which it occurs 800 1. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing 2. Explain the difference in operating income for January, February, and March under variable costing and absorption costing

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