:- Variable & Absorption Costing

Boedecker Corporation's operating data for the current year included the following:

Selling and administrative expenses:

Variable $7.50 per unit sold

Fixed 400,000

Work in progress inventories Finished goods units:

Beginning inventory 10,000 units

Ending inventory 20,000 units

Produced 90,000 units

Sold 80,000 units

Standard manufacturing costs per

product unit: $9

Direct material 12

Direct labour 3

Variable overhead 6

Fixed overhead* $30

TOTAL

Selling price per product unit $45

* Based on denominator activity of 90,000 units and total fixed overhead of $540,000.

REQUIRED:

1.Prepare an income statement in good form, using variable costing.

2.Prepare an income statement, in good form, using absorption costing.

3.Reconcile (account for) any difference in net income between variable and absorption costing.