Solution-Reconciliation of difference between two

Reconciliation of difference between two profit-loss methods

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Reference no: EM133106711

Question - Say IT with Love Company is a manufacturing company that produces portable stoves. The data available for the years ended December 30, 2019 and December 30, 2020 regarding the company's operational activities are

	2020	2019
Unit beginning	?	3,000
Unit produced	38,000	42,000
Unit ending	3,000	4,000
Unit practical capacity	40,000	40,000
Price per unit	$125	$110
Variable cost per unit	$40	$35
Selling & administrative per unit- Variable	$5	$3
Fixed FOH per unit	$25	$22
Selling & administrative - Fixed	$275,000	$225,000
Variable Variance	$20,000 UF	$20,000 F

Required -

(1) Prepare a Profit/Loss Report in 2020 using Direct Costing and Full Costing (include your calculations)!

(2) Reconciliation of the difference between the two profit/loss methods above!

(3) Which profit/loss report is appropriate to be presented to the company's internal parties? Explain why!

Reference no: EM133106711

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Reconciliation of difference between two profit-loss methods

Reference no: EM133106711

Reference no: EM133106711

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