P6-66A (similar to)

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Owen's FoodsOwen's Foods

produces frozen meals, which it sells for

$ 8$8

each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business:

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(Click the icon to view the data.)

Requirements

1.	Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February.
2.	Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing.
3.	Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing.

Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February.

	January
	Absorption	Variable
	costing	costing
Total product cost

Homework: Chapter 06 Graded Homework Save Score: 0 of 10 pts 5 of 5 (3 complete) HW Score: 30%, 9 of 30 pts P6-66A (similar to) : Question Help Owen's Foods produces frozen meals, which it sells for $8 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: E: (Click the icon to view the data.) Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February 2. Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing. 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February January X i Data Table Absorption costing Variable costing Total product cost Sales A Production Variable manufacturing expense per meal ............ $ Sales commission expense per meal ................. $ Total fixed manufacturing overhead ............... $ Total fixed marketing and administrative expenses ..... $ January 1,500 meals 2,000 meals 4 1 800 300 $ $ $ $ February 1,800 meals 1,600 meals 4 1 800 300 Enter any number in the edit fields and then click Check Answer Print Done 0 parts remaining Check