Refer to your answers to Exercise E21-15. In May 2016, RefreshAde produced 20,000 cases of powdered drink mix and sold 23,000 cases, of which 3,000 were produced in April. The sales price was $30, variable costs were $13 per case ($10 manufacturing and $3 selling and administrative), and total fixed costs were $70,000 ($45,000 manufacturing and $25,000 selling and administrative).
In E RefreshAde produced 15,000 cases of powdered drink mix and sold 12,000 cases in April 2016. The sales price was $30, variable costs were $13 per case ($10 manufacturing and $3 selling and administrative), and total fixed costs were $70,000 ($45,000 manufacturing overhead and $25,000 selling and administrative). The company had no beginning Finished Goods Inventory.
Requirements
1. Prepare the May income statement using variable costing.
2. Determine the balance in Finished Goods Inventory as of May 31.