Explain in one or two sentences the key differences between

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Reference no: EM13584088

Succulent Juice Company manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year of operations.

Number of Gallons Produced	80,000
Number of Gallons Sold	70,000
Sales Price	$3.00/gallon
Unit Product Cost (variable costing)	$1.45/gallon
Contribution Margin	$84,000
Total Fixed Manufacturing Overhead	$?
Total Fixed Selling & Administrative	$25,000
Variable Selling & Administrative	$?
Inventory value under absorption costing	$29,500

1. Prepare an Income statement for Succulent using the Absorption Costing Method. (Hints: How many units were in inventory? What was the cost per unit? Why is the CM only $84,000?)

2. Explain in one or two sentences, the key differences between the net income under Absorption and the net income under Variable costing. Determine the variable costing net income. Prepare a variable costing income statement.

Reference no: EM13584088

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