Problem $8-32$ Staightforward Problem on Absorption versus Variable Costing $($LO $8-2,8-3,8-4)$

SKinny Dippers Inc. produces nonfat frozen yougurt. The product is sold in ten$-$gallon containers, which have the following price and variable costs.

$\backslash$table$[[$Sales price,$149],[$Direct material,$19],[$Direct labor,$11],[$Variable Overhead,$11]]$

Budgeted fixed overhead is $201,$ the company's first year of operations, was $$540,000.$ Actual production was $180,000$ ten$-$gallon containers, of which $162,000$ were sold. Skinny Dippers Inc. incurred the following selling and administration expenses.

Fixed $$180,000$ for the year

Variable $$1$ per container sold

Required:

$(1)$ Compute the product cost per container of frozen yougurt under $($a$)$ variable costing and $($b$)$ absorption costing

$(2-$a$)$ Prepare an operating income statement for $201$ Using absorption costing. using variable costing.

$(3)$ Reconcile the operating income reported under the two methods by listing the two key places where the income statements differ.

$(4)$ Reconcile the operating income reported under the two methods using the shorteut method.

Re: $1$

heq #$2a$

For the yar Endal Dec, $20$x$1$

Req#$3$

$\backslash$table$[[v,],[v,],[$Subtotal$,],[v,$$