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TUTORIAL 11 MARGINAL COSTING AND ABSORPTION COSTING Question 2 Charlassier Corporation manufactures and sells laptop computers and uses standard costing. For the month of
TUTORIAL 11 MARGINAL COSTING AND ABSORPTION COSTING Question 2 Charlassier Corporation manufactures and sells laptop computers and uses standard costing. For the month of September there was no beginning inventory, there were 3,000 units produced and 2,500 units sold. The manufacturing variable cost per unit is $385 and the variable operating cost per unit was $312.50. The fixed manufacturing cost is $450,000 and the fixed operating cost is $75,000. The selling price per unit is $925. Required: Prepare the income statement for Charlassier Corporation for September under variable costing. Question 3 Ireland Corporation planned to be in operation for three years. During the first year, 20x1, it had no sales but incurred $240,000 in variable manufacturing expenses and $80,000 in fixed manufacturing expenses. In 20x2, it sold half of the finished goods inventory from 20x1 for $200,000 but it had no manufacturing costs. In 20x3, it sold the remainder of the inventory for $240,000, had no manufacturing expenses and went out of business. Marketing and administrative expenses were fixed and totaled $40,000 each year. Required: a. Prepare an income statement for each year using absorption costing. b. Prepare an income statement for each year using variable costing.
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