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July August September Production in units 85,000 80,000 60,000 Sales in units 70,000 75,000 80,000 Inventory at July 1 5000 units at $16 each Selling
July | August | September | ||||
Production in units | 85,000 | 80,000 | 60,000 | |||
Sales in units | 70,000 | 75,000 | 80,000 | |||
Inventory at July 1 | 5000 units at $16 each | |||||
Selling price per unit | $ 25 | |||||
Variable manufacturing costs per unit | $ 9 | |||||
Variable selling and administrative costs per unit sold | $ 6 | |||||
Fixed manufacturing overhead per month | $ 560,000 | |||||
Fixed selling and adminitrative expenses per month | $ 200,000 | |||||
Other information: | ||||||
Fixed overhead is allocated to units of production based on a budgeted production volume of 80,000 units per month | ||||||
Any over or underallocated overhead is written off to cost of goods sold | ||||||
There are no beginning or ending work in process inventories 1. Prepare Income statements under absorption and variable costing. Don't forget to add beginning and ending inventory! | ||||||
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