Question: I need help with 2b, 3 and 4 please! I've provided all the information that was included in the problem! Arcade Away manufactures video games



I need help with 2b, 3 and 4 please! I've provided all the information that was included in the problem!
Arcade Away manufactures video games that it sells for $36 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Arcade Away's first two months in business: (Click the icon to view the data.) Read the Data table Requirements 1. Compute the product cost per game produced under absorption costing and under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: a. absorption costing. b. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing. 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
