Question
Rane Inc. manufactures hair brushes that sell at wholesale for $3.50 per unit. Budgeted production in both 2006 and 2007 was 3,600 units. There was
Rane Inc. manufactures hair brushes that sell at wholesale for $3.50 per unit. Budgeted production in both 2006 and 2007 was 3,600 units. There was no beginning inventory in 2006. The following data summarized the 2006 and 2007 operations:
|
| 2006 | 2007 |
| Units sold | 3,250 | 3,350 |
| Units produced | 3,600 | 3,000 |
| Costs: |
|
|
| Variable factory per unit | $ 0.80 | $ 0.80 |
| Fixed factory overhead | $ 1,620.00 | $ 1,620.00 |
| Variable marketing | $ 1.00 | $ 1.00 |
| Fixed administrative | $ 800.00 | $ 800.00 |
Required: Determine income under both full costing and variable costing and explain the difference for 2006 only.
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Sound Investing, Chapter 25 - Change In Auditors
Authors: Kate Mooney
3rd Edition
0071719474, 9780071719476
