Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now

Untitled

13-58 Absorption and Variable Costing
The Trapani Company had the following actual data for 20X4 and 20X5:
20X4
20X5
Units of finished goods
Opening inventory
2,000
Production
15,000
13,000
Sales
13,000
14,000
Ending Inventory
2,000
1,000
The basic production data at standard unit costs for the two years were
Direct materials
$22
Direct labor
18
Variable factory overhead
4
Standard variable costs per unit
44
Fixed factory overhead was budgeted at $98,000 per year. The expected volume of production was 14,000 units so the fixed overhead rate was $98,000 รท 14,000 = $7 per unit.
Budgeted sales price was $75 per unit. Selling and administrative expenses were budgeted at variable, $9 per unit sold, and fixed, $80,000 per year.
Assume that there were absolutely no variances from any standard variable costs or budgeted selling prices or budgeted fixed costs in 20X4.
There were no beginning or ending inventories of work in process.
1. For 20X4, prepare income statements based on standard variable (direct) costing and standard absorption costing. (The next problem deals with 20X5.)
2. Explain why operating income differs between variable costing and absorption costing. Be specific
You Want A Similar Paper Done? Don’t be stressed, Click Here To Order this essay!!

Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now