Exercises 18-44 Profit Centers: Comparison of Variable and Full Costing [LO 18-3, 18-4] Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations Prior Year 2,000 units 2,400 units Current Year 2,800 units Sales Production Production cost 2,400 units $ 0.60 $1,200 $ 0.40 $ 500 Factory-variable (per unit) 0.60 -fixed $1,200 Marketing-variable Administrative-fixed 0.40 $ 500 Required 1. Prepare an income statement for each year based on full costing 2. Prepare an income statement for each year based on variable costing 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Prepare an income statement for each year based on full costing YALE COMPANY Full Costing Income Statement Prior Year Current Year Sales 6,000 8,400 Less: Cost of goods sold 440 Beginning inventory Cost of goods produced 0 2,640 2,640 Available for sale 2,640 3,080 Less: Ending inventory (440) Cost of goods sold 2,200 3,080 5,320 Gross margin Less: Selling and administrative costs 3,800 Fixed 500 500 Variable 1,120 800 1,620 3,700 1,300 2,500 Operating income Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Prior Year 2,000 units 2,400 units Current Year Sales Production Production cost 2, 800 units 2,400 units Factory-variable (per unit) 0.60 $1,200 $ 0.40 $ 500 $0.60 $1,200 $ 0.40 $ 500 -fixed Marketing-variable Administrative-fixed Required 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method. Complete this question by entering your answers in the tabs below Required 3 Required 1 Required 2 Prepare an income statement for cach year based on variable costing. YALE COMPANY Variable Costing Income Statement Prior Year Current Year Sales 6,000 8,400 Less: Cost of goods sold Beginning inventory Cost of goods produced 0 Available for sale Less: Ending inventory Cost of goods sold s: Variable selling and administrative Contribution margin s: Fixed manufacturing costs Less: Selling and administrative costs Operating income Exercises 18-44 Profit Centers: Comparison of Variable and Full Costing [LO 18-3, 18-4] Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations Prior Year 2,000 units 2,400 units Current Year 2,800 units Sales Production Production cost 2,400 units Factory-variable (per unit) $0.60 $1,200 $0.40 500 $ 0.60 $1,200 $ 0.40 $ 500 -fixed Marketing-variable Administrative-fixed Required 1. Prepare an income statement for each year based on full costing 2. Prepare an income statement for each year based on variable costing 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method (Negative amounts should be indicated by a minus sign. Round your "Fixed overhead rate" answers to 2 decimal places.) YALE COMPANY Reconciling Difference in Operating Income Between Full and Variable Costin Prior Year Current Year Change in inventory in units x fixed overhead rate Difference in operating income 0 0 K Required 2 Required 3
