Question

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............................... $ 5
Direct labor................................... 4
Variable factory overhead.................... 3
Fixed factory overhead....................... 3
Total cost..................................... $15
Operating statistics for March and April include the following:
The selling price is $20 per unit. There were no inventories on
March 1, and there is no work in process on April 30.
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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  • CreatedMarch 31, 2015
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