Reference no: EM132722364
Question - The chief executive officer of Acadia, Inc. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Acadia, Inc. be used to prepare comparative statements using variable costing and the company's absorption costing. The data follow:
Direct materials $99,000
Direct labor $126,000
Variable factory overhead 72,000
Fixed factory overhead 171,000
Fixed marketing and administrative expense 211,500
The factory produced 90,000 units during the period, and 78,750 units were sold for $787,500.
Required -
1. Prepare an income statement using variable costing.
2. Prepare an income statement using absorption costing.
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