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Please help me solve the following: variable costing income Problem 19-1B Variable costing income statement for two consecutive years P2 Zule Company produces a single
Please help me solve the following: variable costing income
Problem 19-1B Variable costing income statement for two consecutive years P2 Zule Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Year 1 Year 2 Sales ($35 per unit) $1,925,000 $2,275,000 Cost of goods sold ($26 per unit) 1,430,000 1,690,000 Gross profit 495,000 585,000 Selling and administrative 365,000 395,000 expenses Income $ 130,000 $ 190,000 Additional Information 1. Sales and production data for these first two years follow. Year Year Units 1 2 Units produced 60,000 60,000 Units sold 55,000 65,000 b. Its variable costs per unit and fixed costs per year are unchanged during these years. Its $26 per unit product cost using absorption costing consists of the following. Direct materials $4 Direct labor 6 Variable overhead Fixed overhead ($480,000/60,000 units) 8 Total product cost per unit $26 Oo oo a 8 5. Its selling and administrative expenses consist of the following. Selling and Administrative Expenses Year 1 Year 2 Variable selling and administrative ($3 per $165,000 $195,000 unit sold) Fixed selling and administrative 200,000 200,000 Total $365,000 $395,000 Required Prepare income statements under variable costing for each of these two yearsStep by Step Solution
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