Absorption costing income statement
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Below is listed certain elements of the Boylston Company's first year of activity:
Selling price per unit $35
Direct materials per unit $8
Direct labor per unit $6
Variable overhead per unit $2
Fixed factory overhead per year $270,000
Variable selling expenses $ 3 per unit
Fixed selling expenses $65,000
During the year Boylston sold 29,000 units while actual and budgeted production totaled 30,000 units.
REQUIRED:
A. Prepare an absorption costing income statement.
B. Prepare a direct (variable) costing income statement.
C. Explain (reconcile) any difference in net income reported in (A) and (B) above.
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Solution Summary
Solution assists in preparing an income statement under absorption and variable costing.
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