Game Play manufactures video games that it sells for $40 each. The company uses a fixed manufacturing overhead allocation rate of $4 per game. Assume all costs and production levels are exactly as planned. The following data are from Game Play's first two months in business during 2018: Click the icon to view the data.) Read the requirements Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. November 2018 Variable October 2018 Absorption Variable costing costing $ 18 $ 14 Absorption costing $ 18 $ costing Total product cost per game 14 Requirement 2a. Prepare monthly income statements for October and November, including columns for each month and a total column, using absorption costing. Game Play Absorption Costing Income Statement October 2018 November 2018 Total Net Sales Revenue $ 76,000 $ 96,000 $ 172,000 Cost of Goods Sold 34,200 43,200 77,400 Gross Profit 41,800 52,800 94,600 Selling and Administrative Costs 18,000 20,500 38,500 Operating Income $ 23,800 $ 32,300 $ 56,100 Requirement 2b. Prepare monthly income statements for October and November, including columns for each month and a total column, using variable costing. X Data Table Game Play Variable Costing Income Statement October 2018 November 2018 Total November Sales October 1.900 units 2,200 units 14 $ 2,400 units 2,200 units 14 $ Production Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 5 Operating Income 5 Choose from any list or enter any number in the input fields and then click Check Answer. 8.800 8.500 8,800 8,500 Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. October 2018 November 2018 Absorption Variable Absorption Variable costing costing costing costing Total product cost per game $ 18 $ 14 18 $ 14 Requirement 2a. Prepare monthly income statements for October and November, including columns for each month and a total column, using absorption costing. Game Play Absorption Costing Income Statement October 2018 November 2018 Total Net Sales Revenue 76,000 $ 96,000 $ 172,000 Cost of Goods Sold 34,200 43,200 77,400 Gross Profit 41,800 52,800 94,600 Selling and Administrative Costs 18,000 20,500 38,500 23,800 $ 32,300 $ 56,100 Operating Income Requirement 2b. Prepare monthly income statements for October and November, including columns for each month and a total column, using variable costing. Game Play Variable Costing Income Statement October 2018 November 2018 Total Net Sales Revenue 76000 96000 172000 Variable Costs Contribution Margin Fixed Costs Operating Income
