Question
SP 19 Serial Problem Business Solutions (Algo) LO P2 Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equal 300
SP 19 Serial Problem Business Solutions (Algo) LO P2 Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equal 300 workstations (at a sales price of $3,300 each) for 2021. The workstations' manufacturing costs include the following. Direct materials Direct labor Variable overhead Fixed overhead $ 740 per unit $ 350 per unit $ 90 per unit $ 28,800 per year Selling and administrative expenses for these workstations follow. Variable Fixed $ 45 per unit $ 3,700 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. Complete the following income statements using absorption costing. 2. Complete the following income statements using variable costing. 3. Which costing method, absorption or variable, yields the higher income when 320 workstations are produced and 300 are sold? Answer is not complete.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started