Reference no: EM133054007

Question - Variable and absorption costing, and breakeven points - Tammy Cat Tree Co (TCTC) builds luxury cat trees and sells them through the internet to cat owners who wants to provide their cats with more natural environment. At the start of the year, TCTC carried no inventory. During the year, it produced 1,000 cat trees and sold 800 cat trees for $300 each. Fixed production costs were $100,000, and variable production costs were $75 per cat tree. Fixed advertising, website, and other general and administrative expenses were $50,000, and variable shipping costs were $25 per tree.

Required - Prepare an operating statement of comprehensive income assuming TCTC uses:

i. Variable Costing

ii. Absorption Costing