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Question - Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is $60.
The variable costs per unit were:
Direct materials -7
Direct Labor - 6
Variable manufacturing overhead - 5
Variable selling and administrative - 6
Fixed costs per year:
Fixed manufacturing Overhead - $700,000
Fixed Selling and Administrative expenses - $300,000
(a) Prepare the Income Statement using Absorption Costing.
(b) Prepare the Income Statement using Variable Costing.
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