The Wye Co. Ltd. expects to produce 11,000 units of product RGW during its fi rst year of operations. The following standard manufacturing costs per unit were established, based on this expected production volume:
Direct materials ......................$13
Direct labour ...........................12
Variable overhead .....................11
Fixed overhead .........................6
Unit standard cost ..................$42
No variable selling and administrative costs were incurred during the year. At the end of the first year of operations, the accountant prepared income statements utilizing actual absorption costing, normal variable costing, normal absorption costing, standard variable costing, and standard absorption costing. These five income statements, randomly labelled A through E, are produced below:

REQUIRED
A. Which income statement was prepared using actual absorption costing?
B. Which income statement was prepared using standard variable costing?
C. How many units of product RGW were actually produced during the year?

Transcribed Image Text:

$540,000 $540,000 $540,000 $540,000 $540,000 346,500 324,000 400,500 378,000 423,000 Sales Cost of sales Variances: Direct materials Direct labour Variable overhead Fixed overhead Other costs 15,000 10,000 80,000 11,500 514,000 505,500 508,000 503,000 5,000 20,000 15,000 5,000 20,000 15,000 10,000 80,000 15,000 150,000 150,000 80,000 Operating income $28,500 $26,000 $ 34,500 $32,000 $37,000