Absorption and Variable Costing Comparisons: Production Equals Sales

Assume that Smuckers manufactures and sells $45,000$ cases of peanut butter each quarter. The following data are available for the third quarter of the year.

Total fixed manufacturing overhead $$675,000$ Fixed selling and administrative $1,225,000$ Sales price per case $85$ Direct materials per case $20$ Direct labor per case $10$ Variable manufacturing overhead per case $4$

Required

a$.$ Compute the cost per case under both absorption costing and variable costing.

$$ Absorption $Answer $1$

$$ Variable$$ $Answer $2$

b$.$ Compute net income under both absorption costing and variable costing.

Do not use a negative sign with your answers.

SMUCKERS Absorption Costing Income Statement For the Third Quarter of the Year Sales Answer $3$ Answer $4$

Answer $5$ Answer $6$

Answer $7$ Answer $8$

Answer $9$ Net income Answer $10$

SMUCKERS Variable Costing Income Statement For the Third Quarter of the Year Sales Answer $11$ Answer $12$

Answer $13$ Answer $14$

Answer $15$ Fixed expenses: Answer $16$

Answer $17$ Selling and administrative Answer $18$ Answer $19$ Net income Answer $20$