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Stark, Inc., produces and sells a unique robot antenna. The company has just opened a new plant to manufacture the antenna, and the following cost
Stark, Inc., produces and sells a unique robot antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been reported for the first month of the new plant's operation: Beginning over 0 Units produced Lits 10,000 Sailing pran Selling and Alinexpenses 52 50.000 Manufacturing com Tired material con Director Variable overhead 3 Fixoloved cost Total) $490,000 Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month. Assume that direct labour is a variable cost. Submission Instructions: Assuming that the company uses absorption costing, compute the unit product cost and prepare an income statement Assuming that the company uses variable costing. compute the unit product cost and prepare an income statement c. Explain the reason for any difference in the ending inventories under the two costing methods and the impact of this difference on reported operating income. Stark, Inc., produces and sells a unique robot antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been reported for the first month of the new plant's operation: Beginning over 0 Units produced Lits 10,000 Sailing pran Selling and Alinexpenses 52 50.000 Manufacturing com Tired material con Director Variable overhead 3 Fixoloved cost Total) $490,000 Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month. Assume that direct labour is a variable cost. Submission Instructions: Assuming that the company uses absorption costing, compute the unit product cost and prepare an income statement Assuming that the company uses variable costing. compute the unit product cost and prepare an income statement c. Explain the reason for any difference in the ending inventories under the two costing methods and the impact of this difference on reported operating income
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