Prepare the company December income statement

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Question - A Company, a manufacturer of slippers, began operations on May 1 of the current year. During this time, the company produced 200,000 units and sold 180,000 units at a sales price of $36 per unit. Cost information for this period is shown in the following table:

Production costs

Direct Material $4.00 per unit

Direct Labor $5.75 per unit

Variable overhead $286,000 in total

Fixed overhead $420,000 in total

Non-production costs

Variable selling and administrative $8,000 in total

Fixed selling and administrative $30,000 in total

Required -

a. Prepare the company's December 31 income statement for the current year under absorption costing.

b. Prepare the company's December 31 income statement for the current year under variable costing.

Reference no: EM132559021

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