Absorption costing method and direct costing method

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Reference no: EM13793518

The Tijama Manufacturing Company has determined the cost of manufacturing a unit of product to be as follows, based on normal production of 50,000 units per year: Direct materials $20.00 Direct labor 15.00 Variable factory overhead 10.00 $45.00 Fixed factory overhead 12.00 $57.00 Operating statistics for the month of August and September include August September Units produced 4,200 4,000 Units sold 3,500 4,200 Selling and administrative expenses $25,000 $35,000 The selling price is $70 per unit. There were no inventories on August 1, and there is no work in process at September 30. Prepare comparative income statements for each month under the following methods: a. Absorption costing method b. Direct costing method

Reference no: EM13793518

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