Problem 2: The following information are taken from the books of Myka Company, which assumes FIFO...

 

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Problem 2: The following information are taken from the books of Myka Company, which assumes FIFO inventory cost flow: Inventory (in units) Beginning Inventory 2019 -None- 2020 ??? Production 10,000 units 9,000 units Ending inventory 3,500 units 1,000 units Sales (P2 per unit) ??? ??? Variable manufacturing costs (P0.75 per unit) P7,500 P6,750 Fixed manufacturing costs P5,000 P5,400 Selling and administrative costs (50% variable) P4,500 P7,500 Required: 1. Determine 2019 profit under variable and absorption costing. 2. Reconcile the two income figures in No. 1 3. Determine 202 profit under variable and absorption costing. 4. Reconcile the two income figures in No. 3 Problem 2: The following information are taken from the books of Myka Company, which assumes FIFO inventory cost flow: Inventory (in units) Beginning Inventory 2019 -None- 2020 ??? Production 10,000 units 9,000 units Ending inventory 3,500 units 1,000 units Sales (P2 per unit) ??? ??? Variable manufacturing costs (P0.75 per unit) P7,500 P6,750 Fixed manufacturing costs P5,000 P5,400 Selling and administrative costs (50% variable) P4,500 P7,500 Required: 1. Determine 2019 profit under variable and absorption costing. 2. Reconcile the two income figures in No. 1 3. Determine 202 profit under variable and absorption costing. 4. Reconcile the two income figures in No. 3