Question
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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