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PIVOV Royal Industries has one product. Information about the production and sales of that product for past year follows Totae Selling price per unit 49
PIVOV Royal Industries has one product. Information about the production and sales of that product for past year follows Totae Selling price per unit 49 Direct material per unit 18 Direct labor per unit Total annual manufacturing overhead 221,000 - 17,000013 Fixed portion of annual manufacturing overhead 187,000 Variable operating expenses per unit sold 3 Fixed operating expenses per year in total 47,000 Units manufactured 17,000 Units sold 13,000 Units in beginning inventory 0 a d 1. Prepare two income statements for the year, one using absorption costing and one using variable costing. Use those statements to answer the following questions: What is the product cost per unit using absorption costing? 18+6+13=37 b. What is the product cost per unit using variable costing? 18+ What is the ending inventory balance using absorption costing? What is the ending inventory balance using variable costing? What is cost of goods sold using absorption costing? + What is cost of goods sold using variable costing? 8 What is operating income using absorption costing? What is operating income using variable costing? 2. What is the underlying reason for the difference in operating income between the two cost methods? e h 2 CM Men 72:12
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