Determine income under both full and variable costing

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Question - McShane Inc. manufactures hair brushes that sell at wholesale for $60.00 per unit. Budgeted production in both 2009 and 2010 was 2,000 units and fixed overhead budgeted was $25,000 in each year. There was no beginning inventory in 2009. The following data summarized the 2009 and 2010 operations:

2009 2010

Units sold 2000 2000

units produces 2500 1500

Costs

Variable Mfg unti cost 20 20

Fixed factory overhead 25000 25000

Variable marketing unit cost 2 2

Fixed administrative 10000 10000

Required: Determine income under both full costing and variable costing and explain the difference.

Reference no: EM131821956

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