Reference no: EM133052205

Question - The following price and operating cost information applies to mount motorcycle company

Price $10 000. Per motorcycle

Variable manufacturing costs

Raw materials 2,000

Direct labour & variable overheads 1,000 per motorcycle

Fixed manufacturing costs 40,000 per month

Variable selling & administrative costs 250 per motor

Fixed selling & administrative costs 40,000 per month

No beginning balance I'm finished goods is evident because the beginning inventory account on the balance sheet is zero. Average manufacturing is 10 motorcycles per month. Sales are seasonal, so in some months no motorcycles are produced, whilst in other month's manufacturing is high.

During the most recent months, the company produced 18 motorcycles and sold 15.

Prepare an income statement for the most recent month using the variable costing method.

Prepare an income statement for the most recent month using the absorption costing method and choosing. A denominator level that represents normal capacity.

Prepare a schedule that reconciles the incomes among the two income statements.