Exercises $18-45($Static$)$ Full vs$.$ Variable Costing $[$L$018-3,18-4]$

Security Technology Incorporated $($STI$)$ is a manufacturer of an electronic control system used in the manufacture of certain specialduty auto transmissions used primarily for police and military applications. The part sells for $$55$ per unit and STI had sales of $24,000$ units in the current year, $2021.$ STI had no inventory on hand at the beginning of $2021$ and is projecting sales of $26,000$ units in $2022.$ STI is planning the same production level for $2022$ as in $2021,25,000$ units. The variable manufacturing costs for STI are $$16,$ and the variable selling costs are only $$0\mathrm{.}50$ per unit. The fixed manufacturing costs are $$200,000$ per year, and the fixed selling costs are $$500$ per year.

Required:

Prepare an income statement for each year using full costing.

Prepare an income statement for each year using variable costing.

Prepare a reconciliation of the difference each year in the operating incomeresulting from the full and variable costing methods.

Complete this question by entering your answers in the tabs below.

Required $1$

Prepare an income statement for each year using variable costing.

SECURITY TECHNOLOGY INCORPORATED

Variable Costina

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