10-1 Absorption and variable costing income statements Biscayne Industries has determined the cost of manufacturing a unit of product as follows, based on normal production of 100,000 units per year: Direct materials..... Direct labor...... Variable factory overhead...... Fixed factory overhead..... Total cost. $5 3 3 $15

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
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P10-1
Absorption and variable costing income statements
Biscayne Industries has determined the cost of manufacturing a
unit of product as follows, based on normal production of 100,000
units per year:
Direct materials.
Direct labor...
Variable factory overhead
Fixed factory overhead.
Total cost.
Operating statistics for March and April include the following:
March
12,000
8,000
Units produced.
Units sold.
Selling and administrative
expenses (all fixed)...
April
$12,000
$5
4
8,000
12,000
$12,000
The selling price is $20 per unit. There were no inventories on
March 1, and there is no work in process on April 30.
3
3
$15
Required:
Prepare comparative income statements for each month under
each of the following:
1. Absorption costing (include under- or overapplied fixed
overhead).
2. Variable costing.
Transcribed Image Text:P10-1 Absorption and variable costing income statements Biscayne Industries has determined the cost of manufacturing a unit of product as follows, based on normal production of 100,000 units per year: Direct materials. Direct labor... Variable factory overhead Fixed factory overhead. Total cost. Operating statistics for March and April include the following: March 12,000 8,000 Units produced. Units sold. Selling and administrative expenses (all fixed)... April $12,000 $5 4 8,000 12,000 $12,000 The selling price is $20 per unit. There were no inventories on March 1, and there is no work in process on April 30. 3 3 $15 Required: Prepare comparative income statements for each month under each of the following: 1. Absorption costing (include under- or overapplied fixed overhead). 2. Variable costing.
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