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Question - Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $110 per unit.
Manufacturing costs
Direct materials per unit
$42
Direct labor per unit
$16
Variable overhead per unit
$5
Fixed overhead for the year
$396,000
Selling and administrative cost
Variable selling and administrative cost per unit
$11
Fixed selling and administrative cost per year
$105,000
Required -
1a. Assume the company uses absorption costing. Determine its product cost per unit.
1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.
2a. Assume the company uses variable costing. Determine its product cost per unit.
2b. Assume the company uses variable costing. Prepare its income statements for the year under variable costing.
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