Question
Santana Rey expects sales of Business Solutionss line of computer workstation furniture to equal 300 workstations (at a sales price of $3,500 each) for 2018.
Santana Rey expects sales of Business Solutionss line of computer workstation furniture to equal 300 workstations (at a sales price of $3,500 each) for 2018. The workstations manufacturing costs include the following.
Direct materials $ 790 per unit Direct labor $ 310 per unit Variable overhead $ 80 per unit Fixed overhead $24,000 per year
The selling expenses related to these workstations follow. Variable selling expenses $ 30 per unit Fixed selling expenses $3,500 per year
Santana is considering how many workstations to produce in 2018. She is confident that she will be able to sell any workstations in her 2018 ending inventory during 2019. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations.
Required: A: Complete the following income statements using absorption costing. B: Complete the following income statements using variable costing.
Note: Please solve the problem completely with details that I can practice and learn. Thank you.
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