Variable Cost per Unit (VCPU)= $ 5 per unit

Fixed Cost per Unit (FCPU): $ 5 per unit    

The company produced 1,000 units and sold 990 units.

1) Compute the fixed manufacturing overhead per unit.

2) Prepare the income statement using the absorption costing system. Ignore Income tax.

3) Prepare the income statement using the variable costing system. Ignore Income tax.

4) Reconciliate the difference in the net income between the two financial statements in question 1.

 

Type of cost Direct material Direct labor MOH Selling and administrative expense Total Total cost $ 10,000 $ 5,000 $ 23,000 $ 9,900 $ 28,100 Variable cost $ 5,000 $ 2,500 $ 11,500 $ 2,970 $ 16,030 Fixed cost $ 5,000 $ 2,500 $ 11,500 $ 6,930 12,070