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Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $
Sims Company began operations on January 1. Its cost and sales information for this year follow.
Direct materials | $ 40 | per unit |
---|---|---|
Direct labor | $ 60 | per unit |
Variable overhead | $ 30 | per unit |
Fixed overhead | $ 7,000,000 | per year |
Variable selling and administrative expenses | $ 11 | per unit |
Fixed selling and administrative expenses | $ 4,250,000 | per year |
Units produced | 100,000 | units |
Units sold | 70,000 | units |
Sales price | $ 350 | per unit |
1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.
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