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

Variable $Answer 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
AnswerContribution marginCost of goods soldGross profitManufacturing overheadSelling& administrative expensesVariable costs of goods sold	Answer
AnswerContribution marginCost of goods soldGross profitManufacturing overheadSelling& administrative expensesVariable costs of goods sold	Answer
AnswerContribution marginCost of goods soldGross profitManufacturing overheadSelling& administrative expensesVariable costs of goods sold	Answer
Net income	Answer

SMUCKERS
Variable Costing Income Statement
For the Third Quarter of the Year
Sales		Answer
AnswerContribution marginCost of goods soldGross profitManufacturing overheadSelling& administrative expensesVariable costs of goods sold		Answer
AnswerContribution marginCost of goods soldGross profitManufacturing overheadSelling& administrative expensesVariable costs of goods sold		Answer
Fixed expenses:
Answer:Contribution margin/Cost of goods sold/Gross profit/Manufacturing overhead/Selling& administrative expenses/Variable costs of goods sold	Answer
Selling and administrative	Answer	Answer
Net income		Answer