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Great Life Co. commence business on October 1 of the current year. The following data summarized the operation at 100% of capacity during October results

Great Life Co. commence business on October 1 of the current year. The following data summarized the operation at 100% of capacity during October results of Great Life Co.

Production

1,000 units

Sales ($120 per unit)

800 units

Ending Inventory

200 units

Total Cost of goods manufactured

$62,500

Fixed manufacturing costs

$35,000

Total Selling and Administrative expenses

$15,000

Fixed Selling and Administrative expenses

$6,000

Required:

(a)

Prepare an income statement using absorption costing.

(b)

Prepare an income statement using variable costing.

(c)

Explain which one will best suit for the management decision

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