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Fanning Manufacturing pays its production managers a bonus based on the companys profitability. During the two most recent years, the company maintained the same cost
Fanning Manufacturing pays its production managers a bonus based on the companys profitability. During the two most recent years, the company maintained the same cost structure to manufacture its products.
Year | Units Produced | Units Sold | ||||
Production and Sales | ||||||
Year 2 | 4,000 | 4,000 | ||||
Year 3 | 6,000 | 4,000 | ||||
Cost Data | ||||||
Direct materials | $ | 14.70 | per unit | |||
Direct labor | $ | 23.50 | per unit | |||
Manufacturing overheadvariable | $ | 11.60 | per unit | |||
Manufacturing overheadfixed | $ | 96,600 | ||||
Variable selling and administrative expenses | $ | 8.40 | per unit sold | |||
Fixed selling and administrative expenses | $ | 55,000 | ||||
(Assume that selling and administrative expenses are associated with goods sold.)
Fanning sells its products for $109.80 per unit.
Required
Prepare income statements based on variable costing for Year 2 and Year 3.
Req A Year 2 Req A Year 3 Req B Req D Req E Year 2 Req E Year 3 Prepare income statements based on variable costing for Year 2. (Do not round intermediate calculations.) FANNING MANUFACTURING Variable Costing Income Statement For the Year Ended Dec. 31, Year 2 tangula Sh Variable costs: 0 Req A Year 2 Req A Year 3 ReqB Req D Req E Year 2 Req E Year 3 Prepare income statements based on variable costing for Year 3. (Do not round intermediate calculations.) FANNING MANUFACTURING Variable Costing Income Statement For the Year Ended Dec. 31, Year 3 Rectangular Snip Variable costs: $ 0Step by Step Solution
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