Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022
Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-
duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850
units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022.
STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the
variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are
$670 per year.
Required:
1. Prepare an income statement for each year using full costing.
2. Prepare an income statement for each year using variable costing.
3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.)
SECURITY TECHNOLOGY INCORPORATED
Full Costing
Sales
Less: Cost of goods sold
Beginning inventory
Cost of goods produced
Available for sale
Less: Ending inventory
Cost of goods sold
Gross margin
Less: Selling and administrative costs
Variable
Fixed
Operating income
Income Statement
2021
2022
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