In may 2018, ReplenAde produced 15,000 cases of powdered drink mix and sold 16,000 cases, of which 1,000 were produced in April. The total April production was 12,000. The sales price was $30, variable costs were $15 per case ($10 manufacturing and $5 selling and administrative), and total fixed costs were $70,000 ($45,000 manufacturing and 425,000 selling and administrative). ReplenAdes may income statement using variable costing follows:

In May 2018 Replende produced 15,000 cases of powdered drink mix and sold 16,000 cases, of which 1,000 were produced in April, ($45,000 manufacturing and $25,000 selling and administrative). ReplenAde's May income statement using variable costing follows: (Click the icon to view the variable costing income statement.) Read the requirements Requirement 1. Prepare the May income statement using absorption costing. Requirer ReplenAde Income Statement (Absorption Costing) Month Ended May 31, 2018 1. Prepare th 2. Is operatin costing inc 3. Determine Operating Income Requirement 2. Is operating income using absorption costing higher or lower than variable costing income? Explain why The operating income using the absorption cost method is the operating income under the variable cost method. The reason for this is because under absorption costing the 1,000 cases in beginning Finished Goods Inventory included that were not included in the inventory under the variable cost method. in Requirement 3. Determine the balance in Finished Goods Inventory as of May 31. (Enter a "0" for any zero amounts.) The finished goods inventory as of May 31, 2018 is were $15 per case (S10 manufacturing and $5 selling and administrative), and total fixed costs were $70,000 Reference ReplenAde Income Statement (Variable Costing) Month Ended May 31, 2018 Net Sales Revenue $ 480.000 Variable Costs $ 160.000 Variable Manufacturing Overhead Variable Selling and Administrative Costs Contribution Margin 80.000 240,000 240.000 Fixed Costs: Fixed Manufacturing Overhead 45,000 25,000 70.000 Fixed Selling and Administrative Costs Operating Income $ 170,000 Requirements ho 1. Prepare the May income statement using absorption costing 2. Is operating income using absorption costing higher or lower than variable costing income? Explain why. 3. Determine the balance in Finished Goods Inventory as of May 31. Print Done