Northern Bicycle produces an inexpensive motorbike that sells for P12,000. Selected data for the company's operations...

 

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Northern Bicycle produces an inexpensive motorbike that sells for P12,000. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Manufacturing overhead Selling and administrative Fixed costs per year: Manufacturing overhead Selling and administrative 300 1,000 800 500 P 1,300 800 500 200 P 4,000,000 2,000,000 Required: 2, 1. Compute the unit costs under absorption and variable costing methods. Compute the operating income under absorption and variable costing methods. Compute the value of ending inventory under absorption and variable costing methods. 4. Reconcile the difference in operating income under the absorption and variable costing methods. Northern Bicycle produces an inexpensive motorbike that sells for P12,000. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Manufacturing overhead Selling and administrative Fixed costs per year: Manufacturing overhead Selling and administrative 300 1,000 800 500 P 1,300 800 500 200 P 4,000,000 2,000,000 Required: 2, 1. Compute the unit costs under absorption and variable costing methods. Compute the operating income under absorption and variable costing methods. Compute the value of ending inventory under absorption and variable costing methods. 4. Reconcile the difference in operating income under the absorption and variable costing methods.