Question
Please show step on how to find answers for question below. Thank you. Question #1 Consider the following information: Q1 Q2 Q3 Beginning inventory (units)
Please show step on how to find answers for question below. Thank you.
Question #1
Consider the following information:
| Q1 | Q2 | Q3 |
Beginning inventory (units) | 0 | 300 | 300 |
Actual units produced | 1,000 | 800 | 1,250 |
Budgeted units to be produced | 1,000 | 1,000 | 1,000 |
Units sold | 700 | 800 | 1,500 |
Manufacturing costs per unit produced | $900 | $900 | $900 |
Marketing costs per unit sold | $600 | $600 | $600 |
Fixed manufacturing costs | $400,000 | $400,000 | $400,000 |
Fixed marketing costs | $140,000 | $140,000 | $140,000 |
Selling price per unit | $2,500 | $2,500 | $2,500 |
There are no price, efficiency, or spending variances, and any production-volume variance is directly written off to cost of goods in the quarter in which it occurs.
a) Prepare income statements for Q1, Q2, and Q3 using variable costing and absorption costing.
b) Explain the differences in operating income between the two costing systems for each quarter. Be specific!
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