• Peachtree company manufactures peach jam. because of bad weather, its peach crop was small. the following data have been gathered for the summer quarter of 2009:
• beginning inventory (cases) … 0
• cases produced ……………… 10,000
• cases sold ……………………. 9,400
• sales price per case ………….. $60
• direct materials per case … $8
• direct labor per case … $9
• variable manufacturing overhead per case ………………. $3
• total fixed manufacturing overhead………………………. $400,000
• variable selling and administrative cost per case ………… $2fixed selling and administrative cost …………………….. $48,000
• required
• a. prepare a functional income statement for the quarter using absorption costing.
• b. prepare a contribution income statement for the quarter using variable costing.
• c. what is the value of ending inventory under absorption costing?
• d. what is the value of ending inventory under variable costing?
• e. explain the difference in ending inventory under absorption costing and variable costing.