Cowell Corporation produces one product. Its cost includes direct materials ($10 per unit), direct labor ($8 per

Question:

Cowell Corporation produces one product. Its cost includes direct materials ($10 per unit), direct labor ($8 per unit), variable overhead ($6 per unit), fixed manufacturing ($250,000), and fixed selling and administrative ($30,000). In October 2010, Cowell produced 25,000 units and sold 20,000 at $50 each.


Instructions

(a) Prepare an absorption costing income statement.

(b) Prepare a variable costing income statement.

(c) Explain the difference in net income in the two income statements.


Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Question Posted: