Question

Roosevelt Enterprises has determined the cost of manufacturing a unit of product as follows, based on normal production of 50,000 units per year:
Direct materials............................................. $ 8
Direct labor................................................. 6
Variable factory overhead.................................. 5
Fixed factory overhead..................................... 4
Total cost................................................... $23
Operating statistics for October and November include the following:
The selling price is $30 per unit. There were no inventories on October 1, and there is no work in process on November 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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