Reference no: EM132521592

Income Statements under Absorption and Variable Costing

In the coming year, Kalling Company expects to sell 28,700 units at $32 each.

Kalling's controller provided the following information for the coming year:

Units production                   30,000

Unit direct materials             $ 9.95

Unit direct labor                     $ 2.75

Unit variable overhead                 $ 1.65

Unit fixed overhead                      $ 2.50

Unit selling expense (variable)            $ 2.00

Total fixed selling expense                   $ 65,500

Total fixed administrative expense             $231,000

• The unit fixed overhead is based on 30,000 units produced.

Question 1. Calculate the cost of one unit of product under absorption costing.

Question 2. Calculate the cost of one unit of product under variable costing.

Question 3. Calculate operating income under absorption costing for next year.

Question 4. Calculate operating income under variable costing for next year