B30 H A B C D E F G 1 Problem 4 2 3 A business operated at 100% of capacity during its first month and provided following information 4 Number of units produced: 5,000 units 5 Production costs (5,000 units): $ 6 Direct materials $70,000 17 Direct labor 20,000 8 Variable factory overhead 10,000 9 Fixed factory overhead 2,000 $102,000 10 Operating expenses 11 Variable operating expenses $17,000 12 Fixed operating expenses 1,000 18,000 13 14 1,000 units remain unsold at the end of the month and sales total $150,000 for the month 15 16 Required: 17 Calculate 18 A. Income from operations and Ending inventory under the Absorption costin 119 B. Income from operations and Ending inventory under the Variable costing. 20 C. Explain the differences in income under the two costing systems. 21 22 Solution: 23 A. Absorption costing 24 Product costs per unit per unit 25 Sales 126 COGS 27 Gross profit 28_Operating expenses 29 Income from operations 30 31 Ending inventory 32 33 B Variable costing 34 Product costs per unit per unit 35 Sales 36 Total variable costs (VCOGS + VSA) 37 Contribution margin 38 Total feed costs (Fixed OH + FSA) 39 Income from operations 40 41 Ending inventory 42 43 C. 44 Answer: 45 47 42 50 51 52 53 54 55 56 57 58 59 Problemi Problem2 problems Problqx14 Ready