Reference no: EM132755053

The manufacturing and selling data for Abracadabra Inc. for the year 2018 is given below: -

Selling price ......................................... $35 /unit

Finished goods (beginning).............. 10200 units

Production ........................................... 90680 units

Sales ..................................................... 84300 units

Variable costs:

Manufacturing .................................... $9 /unit

Selling and administrative ................. $2 /unit

Fixed costs:

Manufacturing ...................................... $320000 /year

Selling and administrative .................. $297000 /year

Problem 1: Assuming costs per unit were consistent over the years in both the costing methods, prepare

(a) Income statement using absorption costing.

(b) Income statement using variable costing.

(c) Reconciliation of net operating incomes