Variable Cost per Unit (VCPU)= $ 5 per unit

Fixed Cost per Unit (FCPU): $ 5 per unit    

The company produced 1,000 units and sold 990 units.

1) Compute the fixed manufacturing overhead per unit.

2) Prepare the income statement using the absorption costing system. Ignore Income tax.

3) Prepare the income statement using the variable costing system. Ignore Income tax.

4) Reconciliate the difference in the net income between the two financial statements in question 1.

 

Transcribed Image Text:

Type of cost Direct material Direct labor MOH Selling and administrative expense Total Total cost $ 10,000 $ 5,000 $ 23,000 $ 9,900 $ 28,100 Variable cost $ 5,000 $ 2,500 $ 11,500 $ 2,970 $ 16,030 Fixed cost $ 5,000 $ 2,500 $ 11,500 $ 6,930 12,070 Type of cost Direct material Direct labor MOH Selling and administrative expense Total Total cost $ 10,000 $ 5,000 $ 23,000 $ 9,900 $ 28,100 Variable cost $ 5,000 $ 2,500 $ 11,500 $ 2,970 $ 16,030 Fixed cost $ 5,000 $ 2,500 $ 11,500 $ 6,930 12,070

Answer rating: 100% (QA)

1 Fixed Manufacturing Overhead per Unit FMOHPU Total Fixed Manufacturing Overhead Fixed Cost of MOH 11500 Number of Units Produced 1000 FMOHPU Total F... View the full answer