Reference no: EM132948102

Question - A manufacturing company, Exeter Corporation produces a single product with a selling price of $74 per unit, the following dataregarding its operation in the current years is available:

Units in Beginning Inventory in Year 1 0 units

Units produced in Year 1 23,000 units

Units sold in Year 1 19, 500 units

Units produced in Year 2 20,000 units

Units sold in Year 2 22,000 units

Variable costs of the company during Year 1 operations:

DM $33

DL $11

MOH $3.5

Selling & Admin $8.70

Fixed costs of the company during Year 1 operations:

Selling & Admin expenses $85,000

Manufacturing Overheads $250,000

Variable costs of the company during Year 2 operations:

DM $33.75

DL $12

MOH $3.5

Selling & Admin $9

Fixed costs of the company during Year 2 operations:

Selling & Admin expenses $85,000

Manufacturing Overheads $250,000

Required -

A. Calculate the product cost per unit for Year 1 and Year 2, under the Variable Costing System.

B. Calculate the product cost per unit for Year 1 and Year 2, under the Absorption Costing System.

C. Prepare the Income Statements for Year 1 and Year 2, using the variable costing system.