Below is an excerpt from the financial data from JasNav Inc. The company has adopted a standard
Question:
Below is an excerpt from the financial data from JasNav Inc. The company has adopted a standard costing system. The following data are for the year ended December 31, 20x3: Inventory, Jan 1, 20x3 - 100,000 units.
Inventory, Dec 31, 20x3 - 35,000 units
Sales - 350,000 units
Selling price - $35.00
Variable manufacturing costs - 7.00
Variable selling costs - 1.50
Fixed manufacturing overhead - $1,710,000
Denominator-level direct labour hours - 7,500
Standard production rate - 40 units per direct labor hour
Fixed operating expenses - $1,000,000
Required
Prepare income statements under variable and absorption costing for the year ended December 31, 20x3, and reconcile the two incomes. Assume that the budget costs were the same as the actual costs incurred.
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon