Question
Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May2017 are as follows: The selling price per vehicle
Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May2017 are as follows:
The selling price per vehicle is $28,000.
The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 700 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs
| 1. | Prepare April and May 2017 income statements forFastRide Motors under (a) variable costing and (b) absorption costing. |
| 2. | Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
