Question 1.3

Springer Energy Inc. produces food products for people active in sports. The following budgeted volume and costs has been provided for one of their post-workout beverages:

Budgeted production	65,000 units
Selling price	$4.00 per unit
Direct material costs	$1.30 per unit
Direct labour costs	$0.20 per unit
Fixed manufacturing costs	$19,500
Variable manufacturing costs	$0.25 per unit
Variable administrative costs	$0.01 per unit
Fixed administrative costs	$3,900

Required

What is the inventoriable cost per drink under each of the following methods?

1. absorption costing
2. variable costing
3. throughput costing

Question 1.4

Gurriel Corporation manufactures and sells laptop computers and uses standard costing. For the month of October there was no beginning inventory, there were 1,500 units produced and 1,250 units sold. The manufacturing variable cost per unit is $770 and the operating cost per unit was $625. The fixed manufacturing cost is $450,000 and the fixed operating cost is $75,000. The selling price per unit is $1,850.

Required

1. Prepare the income statement for Gurriel Corporation for October under variable costing.