This is for my accounting homework. Please show work so I can hopefully understa

Question

This is for my accounting homework. Please show work so I can hopefully understand what is going on. Thank you.



31) The following data is related to sales and production of the Puffs Corporation for last year. S60.00 S25.00 $6.0 $50,000 Selling price per unit Variable manufacturing cost per unit Variable selling and administrative expense per unit Fixed manufacturing overhead (in total) ixed selling and administrative expenses (in total)$8,000 Units produced during year Units sold during year Units in beginning inventory Units in ending inventory 10,000 2,000 Required a. Prepare an income statement for last year using absorption costing. b. Prepare an income statement for last year using variable costing.

Explanation / Answer

CACLULATION OF THE UNIT COST UNDER VARIABLE AND ABSORPTION COSTING Particulars Absorption Costing Variable Costing Variable Manufacturing Cost per unit $                          25.00 $                          25.00 Fixed Manufacturing ($ 50,000 / 10,000) $                            5.00 $                                 -   $                          30.00 $                          25.00 ABOSRPTION COSTING INCOME STATEMENTS Absorption Costing Sales (8,000 units * $ 60) $                    4,80,000 Cost of Goods Sold Beginning inventory $                                 -   Cost of Goods Manufactured (10,000 units * 30.00) $                    3,00,000 Less: Ending Inventory (2,000 Units * 30.0) $                       60,000 Cost of Goods Sold $                    2,40,000 Gross Profit $                    2,40,000 Less : Selling and administrative Expenses Fixed Selling Expenses $                          8,000 Variable Selling Expenses(8,000 units * 6) $                       48,000 Net Income $                    1,84,000 VARIABLE COSTING INCOME STATEMENTS Variable Costing Sales (8,000 units * $ 60) $                    4,80,000 Cost of Goods Sold Beginning inventory $                                 -   Cost of Goods Manufactured (10,000 units * 25.00) $                    2,50,000 Less: Ending Inventory (2,000 Units * 25.0) $                       50,000 Cost of Goods Sold $                    2,00,000 Less: Variable Selling Expenses(8,000 units * 6) $                       48,000 Gross Profit $                    2,32,000 Less : Fixed Expenses Fixed Selling Expenses $                          8,000 Fixed Manufacturing Overhead $                       50,000 Net Income $                    1,74,000

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