Reference no: EM133182459
Question - Variable vs Absorption Costing - Here's some information concerning the estimated costs of Ancient One Products Inc., concerning their production and sales of Celestial Orbs
Direct Materials $120
Direct Labor 30
Variable Manufacturing Overhead 7
Variable Selling 9% of Revenues
Fixed Manufacturing Overhead $600,000
Fixed Selling and Administrative Costs 200,000
The firm expects to produce 30,000 Orbs during the period. The firm expects to sell 25,000 Orbs during the period.
The beginning inventory of Orbs is 0 (none). Expected selling price per Orb is: $310.
Required - Compute unit cost on a variable-cost basis.
1. Compute unit cost on an absorption-cost basis.
2. Prepare a variable-cost income statement.
3. Prepare an absorption-cost income statement.
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