Principles of Cost Accounting: P10-2 Haille Corporation has determined the following selling price

Principles of Cost Accounting

P10-2 Absorption costing versus direct costing
Haille Corporation has determined the following selling price and manufacturing cost per unit based on normal production of 72,000 units per year:
Selling price per unit 22
Variable cost per unit:
Direct materials 4
Direct labor 4
Variable factory overhead 2
Variable cost per unit: 10
Fixed cost per unit:
Fixed factory overhead per year 324,000
Fixed selling and administrative expense per year 48,000
Normal unit production per year 72,000

Month Units Produced Units Sold
October 6,000 3,000
November 1,000 4,000
December 8,000 6,000
October has no beginning inventories.

Required:
Prepare comparative income statements for each month under each of the following:
1. Absorption costing (include under- or overapplied overhead)
2. Variable costing
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