Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equal 300 workstations (at a sales price of $3,000 each) for 2021. The workstations manufacturing costs include the following:

Direct materials, Direct labor, Variable overhead, Fixed overhead, Selling and administrative expenses for these workstations follow.

Variable Fixed $50 per unit $4,000 per year

Santana is considering how many workstations to produce in 2021. She is confident that she will be able to sell any workstations in her 2021 ending inventory during 2022. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations.

Required 1. Compute its income statement under absorption costing assuming

a. 300 workstations are produced, and 300 workstations are sold.

b. 320 workstations are produced, and 300 workstations are sold.

2. Compute its income statement under variable costing assuming

a. 300 workstations are produced, and 300 workstations are sold.

b. 320 workstations are produced, and 300 workstations are sold.

3. Reviewing results from parts 1 and 2, which costing method, absorption or variable, yields the higher income when 320 workstations are produced and 300 are sold?

SP 19 Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equat 300 workstations (at a sales price of $3,000 each) for 2021 . The workstations' manufacturing costs include the following Selling and administrative expenses for these workstations follow, Variable $50 perunit Fixed $4.000 per year Santana if considering how many workstations to produce in 2021 . She is confldent that she will be able to sell any workstations in ber many more workstations. Required 1. Compute its income statement under absorption costing assuming a. 300 workstations are produced, and 300 workstations are sold. b. 320 workstations are produced, and 300 workstations are sold. 2. Compute its income statement under variable costing assuming a. 300 workstations are produced, and 300 workstations are sold. b. 320 workstations afe produced, and 300 workstations are sold. 3. Reviewing results from parts 1 and 2, which costing method, absorption of variable, yelds the higher income when 320 workstations are produced and 300 are sold