W P6-66A (similar to) Question Help Marty's Entrees produces frozen meals, which it sells for $7 each. The company uses the FIFO Inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. 2. Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing. 3. Is operating incorre higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. USLITY cusurly CUSCINI cusuny Total product cost $ 3.35 S 3.00 $ 3.50 $ 3.00 Requirement 2a. Prepare separate monthly income statements for January and for February, using absorp! i Data Table January February Marty's Entrees Income Statement (Absorption Costing) Month Ended January 31 Sales revenue S 10,500 Less: Cost of goods sold 5,025 Gross profit 5,475 Less: Operating expenses 3,400 Operating income 2.075 February 28 12600 Sales ........................................ Production Variable manufacturing expense per meal.......... S Sales commission expense per meal.............$ Total fixed manufacturing overhead...............$ Total fixed marketing and administrative expenses... S 1,500 meals 2,000 meals 3 S 2 S 700 S 400 1,800 meals 1,400 meals 3 2 700 400 S Print Done Enter any number in the edit fields and then click Check Answer. 5 parts remaining Clear All Check Answer W P6-66A (similar to) Question Help Marty's Entrees produces frozen meals, which it sells for $7 each. The company uses the FIFO Inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. 2. Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing. 3. Is operating incorre higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. USLITY cusurly CUSCINI cusuny Total product cost $ 3.35 S 3.00 $ 3.50 $ 3.00 Requirement 2a. Prepare separate monthly income statements for January and for February, using absorp! i Data Table January February Marty's Entrees Income Statement (Absorption Costing) Month Ended January 31 Sales revenue S 10,500 Less: Cost of goods sold 5,025 Gross profit 5,475 Less: Operating expenses 3,400 Operating income 2.075 February 28 12600 Sales ........................................ Production Variable manufacturing expense per meal.......... S Sales commission expense per meal.............$ Total fixed manufacturing overhead...............$ Total fixed marketing and administrative expenses... S 1,500 meals 2,000 meals 3 S 2 S 700 S 400 1,800 meals 1,400 meals 3 2 700 400 S Print Done Enter any number in the edit fields and then click Check Answer. 5 parts remaining Clear All Check
