Question
Exercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Skip to question [The following information applies to the questions displayed
Exercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2
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[The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $130 per unit.
Direct materials | $ 54 | per unit |
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Direct labor | $ 20 | per unit |
Variable overhead | $ 6 | per unit |
Fixed overhead | $ 484,000 | per year |
Variable selling and administrative expenses | $ 12 | per unit |
Fixed selling and administrative expenses | $ 115,000 | per year |
Exercise 6-3 (Algo) Part 1b
1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.
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2a. Assume the company uses variable costing. Determine its total product cost per unit.
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2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
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