Question
Given the following information: Prior Year (Budget) Prior Year (Actual) Current Year (Budget) Current Year (Actual) Beginning Inventory (Units) 0 0 ? ? Sales (Units)
Given the following information:
|
| Prior Year (Budget) | Prior Year (Actual) | Current Year (Budget) | Current Year (Actual) |
| Beginning Inventory (Units) | 0 | 0 | ? | ? |
| Sales (Units) | 600,000 | 580,000 | 575,000 | 570,000 |
| Manufactured (Units) | 600,000 | 590,000 | 640,000 | 610,000 |
| Selling Price ($/unit) | 9.99 | 9.90 | 9.95 | 10.00 |
| Variable Manufacturing Cost ($/unit) | 4.92 | 4.90 | 5.00 | 4.95 |
| Total Fixed Manufacturing Costs ($) | 1,584,000 | 1,561,000 | 1,625,000 | 1,599,531 |
| Variable Selling Cost ($/unit) | 1.00 | 1.01 | 0.99 | 1.00 |
| Total Fixed SG&A Costs ($) | 350,000 | 353,000 | 352,850 | 348,000 |
Other information:
- The manufacturer uses FIFO
- The manufacturer uses Standard Costing
Required:
- Prepare an income statement for the Current Year based on Variable Costing.
- Prepare an income statement for the Current Year based on Absorption Costing.
- Reconcile the difference in Net Income between Variable Costing and Absorption Costing for the current year by comparing this difference in income to the differences in ending inventory for Absorption Costing and Variable Costing.
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Accounting Regulation In Europe
Authors: McLeay Stuart
1st Edition
0333694600, 9780333694602
