Problem 1

The following information are available fro Cres Company: ( The company uses actual costing.)

	2019	2020
Beginning Inventory	None	???
Production	10,000 units	9,000 units
Ending, Inventory	3,500 units	1,000 units
Sales at 2.00 per unit	???	???
Variable Manufacturing cost in total	7,500	???
Fixed Manufacturing cost	5,000	5,400 (increased by 400 for change of total Fixed cost of the company)
Operating Expense (50% Fixed cost)	4,500	7,500

1. What is the profit in 2019 under absorption costing?

2. What is the profit under variable costing?

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Problem 2

Siz company has income of 30,000 under variable costing.

• Product cost per unit under Variable costing - 18 per unit
• Product cost per unit under absorption costing - 20 per unit.
• Inventory decreased by 8,000 units.

What is the income under absorption costing?