Financial and Managerial Accounting: P20-1A During the first month of operations ended May 31, 2010

Financial and Managerial Accounting

PR20-1A Absorption and variable costing income statements
During the first month of operations ended May 31, 2010, Dorm Room Appliance Company manufactured 10,300 microwaves, of which 9,700 were sold. Operating data for the month are summarized as follows:
Sales 1,455,000
Manufacturing costs:
Direct materials 721,000
Direct labor 216,300
Variable manufacturing cost 185,400
Fixed manufacturing cost 92,700 1,215,400
Selling and administrative expenses:
Variable 116,400
Fixed 53,350 169,750

Instructions:
1. Prepare an income statement based on the absorption costing concept. Enter all amounts as positive numbers.
2. Prepare an income statement based on the variable costing concept. Enter all amounts as positive numbers.
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