Question
Feathers Company makes 100,000 units of a particular product, out of a capacity os 150,000 units. At the production level of 100,000 units, the company
Feathers Company makes 100,000 units of a particular product, out of a capacity os 150,000 units. At the production level of 100,000 units, the company has the following revenue and cost components: Sales Price $14 per unit Direct materials $3 per unit Direct labor $2 per unit Variable overhead $2 per unit Fixed overhead $75,000 Variable Selling & administrative costs $1 per unit Fixed selling and admnistrative costs $120,000 1. How many units must Feathers Company sell to reach break even? 2. Prepare a Cost-Volume-Profit chart showing breakeven During the current period, Feathers Company sells 93,000 units out of the production batch of 100,000 3. Prepare an absorption-costing income statement. 4. Prepare a variable-costing income statement. 5. How much is the difference in total ending inventory between absortion and variable costing units? 6. How much is the difference in net income between absortion-costing and variable costing?
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