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WILL UPVOTE PLZ N TY! Absorption and Variable Costing Income Statements for Two Months and Analysls During the first month of operations ended July 31,
WILL UPVOTE PLZ N TY!
Absorption and Variable Costing Income Statements for Two Months and Analysls During the first month of operations ended July 31, Head Gear Inc. manufactured 29,600 hats, of which 28,100 were sold. Operating data for the month are summarized as follows: During August; Head Gear inc; manufactured 26,600 hats and sold 28.100 hats. Operatino data for August are summarized as follows: Sales $207,940 Manufacturing costs: Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable Fixed During August, Head Gear Inc. manufactured 26,600 hats and sold 28,100 hats. Operating data for August are summarized as follows: Sales $207,940 Manufacturing costs: Direct materials $111,720 Direct labor 29,260 Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable $11,240 Fixed Required: 1a. Prepare income statement for July using the absorption costing concept. Head Gear Inc. Absorption Costing Income Statement absorption costing concept. Head Gear Inc. Absorption Costing Income Statement 2a. Prepare income statement for July using the variable costing concept. Head Goar Inr 2b. Prepare income statement for August using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended August 31 2b. Prepare income statement for August using the variable costing concept. manufacturing costs that are expensed. 3b. When large changes in inventory levels occur from one period to the noxt, it is possible for management to misinterpret such increases (or decreases) in operating income as due to changes in: a. costs. b. prices. c. sales volume. d. "sales volume", "prices" and "costs" are correct e. None of these choices is correct. The correct answer is: 4. Based on your answers to (1) and (2), did Head Gear Inc, operate more profitably in July or in August? Explain. Head Gear Inc, was under the variable costing concept. The difference in operating income reported under the absorpbon costing cancept is doe to allocating P. to the Step by Step Solution
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