Question
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $4.60 each. The results for its first year of operations appear in the
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $4.60 each. The results for its first year of operations appear in the table below: Projections Number of drinks produced 50,500 Number of drinks sold 46,500 Direct materials per drink $ 0.61 Direct labor per drink $ 0.31 Variable manufacturing overhead per drink $ 0.21 Total fixed manufacturing overhead $ 32,825 Total fixed selling and administrative costs $ 53,000
Required: 1. Compute the operating income for the first year under full costing. 2. Compute the operating income for the first year under variable costing.
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