(Answered) : Market Co. sells its products for $80 each. The current production level is 25,000 units, although only 20,000 units are anticip

Market Co. sells its products for $80 each. The current production level is 25,000 units, although only 20,000 units are anticipated to be sold.
Unit manufacturing costs are:
Direct materials???$12.50
Direct labor???$20.00
Variable Manufacturing Costs ?$10.00
Total fixed manufacturing Costs?$215,000
Marketing expenses??$7 per unit, plus $72,000 per year

Required: (A) Prepare an income statement using absorption costing and

(B) prepare an income statement using variable costing.

Expert Answer

https://media.cheggcdn.com/media%2Fef7%2Fef77f911-73eb-42fe-acd9-e39f989abd1c%2Fphp3oDc26.png
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Formula sheet

49 B)
50
51 Variable Costing
52 In variable costing entire fixed ovehead is treated as period expense and
53 ending inventory does not carry any fixed overhead cost.
54 Hence product cost include only direct material, direct labour and Variable manufacturing overhead.
55
56 Unit production cost under variable costing =SUM(D10:D12) =SUM(D10:D12)
57 Income

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