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Income statements under absorption costing and variable costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and
Income statements under absorption costing and variable costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (119,000 units) during the first month, creating an ending inventory of 19,000 units. During February, the company produced 100,000 units during the month but sold 119,000 units at $580 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Unit Total Units Cost Cost Manufacturing costs in February 1 beginning inventory: Variable 19,000 $290.00 $5,510,000 Fixed 19,000 36.00 684,000 Total $326.00 $6,194,000
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