Lassen Corporation has determined the following selling price and manufacturing cost per unit based on normal production of 48,000 units per year:
Selling price per unit.................................................... $ 28
Variable cost per unit:
Direct materials............................................................... $ 6
Direct labor..........................................................................7
Variable factory overhead................................................. 3
Variable cost per unit .................................................... $ 16
Fixed costs:
Fixed factory overhead per year .............................. $ 240,000
Fixed selling and administrative expense per year...... 60,000

January has no beginning inventories.
Required:
Prepare comparative income statements, including a comparative schedule of cost of goods sold, for each of these three months in 2016 under each of the following:
1. Absorption costing (include under- or overapplied overhead).
2. Variable costing.

Transcribed Image Text:

Month Units Produced 4,000 3,000 5,000 Units Sold 3,000 4,000 4,000 February March