Question
On January 1, of the current year, Townsend company commenced operations. It operated its plant at 100% capacity during January. The following data summarized the
On January 1, of the current year, Townsend company commenced operations. It operated its plant at 100% capacity during January. The following data summarized the results for January.:
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| Production 50,000
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| Sales ($18 per unit) 42,000 | ||
| Inventory, January 31 8,000 | ||
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| Manufacturing Costs: | ||
| Variable $575,000 | ||
| Fixed $80,000 | ||
| Total $655,000 | ||
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| Selling and administrative expenses | ||
| Variable $35,000 | ||
| Fixed 10,000 | ||
| Total $45,500 | ||
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A. Prepare an income statement using the absorption costing
B. Prepare an income statement using variable costing
C. Explain the difference in absorption costing and variable costing income from operations.
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The Love Audit
Authors: Annah Conwell
1st Edition
B0B9SMDYNM, 979-8843874452
