Question

says the firm sold 204,300 units. Additional Information: Change the sales price per unit to $10.25 and the total Fixed Overhead amount to $224,000 . Prepare an Absorption-Costing Income Statement down to Operating Income. Then prepare a Variable-Costing Income Statement in proper format down to Operating Income.

variable cost per unit:

    Direct Materials:   $2.85

    Direct Labor: $1.92

     variable overhead: $1.60

variable selling: $.90

fixed costs per year:

fixed overhead: $180,000

selling and admin: $96,000

borques produced 200,000 wooden pallets and sold 204,300 at $9 each. Borques had 8,200 pallets in beginning finished good inventor; costs have not xhanged from last year to this year. An actual costing system is used for products costing.

Answer 1

	Absorption-costing income:
	Sales				$2,094,075
	Less: Cost of goods sold			1,530,207
	Gross margin				$563,868
	Less: Selling and administrative expenses	279,870
	Operating income			$ 283,998

Working :

	Unit cost:-
	Unit direct materials cost	$ 2.85
	Unit direct labor cost	1.92
	Unit variable overhead cost	1.60
	Unit fixed overhead cost	1.12
	Total per-unit inventory cost	$ 7.49