Question: Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced $6,650$rackets and sold $5,230.$Each racket was sold at a price of $$90.$Fixed overhead costs are $$86,450$per year, and fixed selling and administrative costs are $$66,600$per year. The company also reports the following per unit variable costs for the year.

$$Direct materials $ $12$

Direct labor $$8$

Variable overhead $$5$

Variable selling and administrative expenses $$2$

Q$1$:Prepare an income statement under variable costing.

Q$2$:Compute the cost of ending finished goods inventory reported on the balance sheet using variable costing.

Q$3$:Prepare an income statement under absorption costing.

Q$4$:Compute the cost of ending finished goods inventory reported on the balance sheet using absorption costing