ANSWER 1&2 The company's P34 unit product cost is computed as follows:P 8Direct materials .Direct labor..Variable manufacturing overhead.. .Fixed manufacturing overhead (P350,000+ 25,000 units) ..Unit product cost...1014P34Production and cost data for the two years are given below:Year 1Year 2Units produced ..Units sold...25,00020,00025,00030,000Required:1. Prepare an income statement for each year in the contribution format usingvariable costing.Reconcile the absorption costing and variable costing net operatingincome figures for each year.2. Problem 3 (Variable Costing Income Statement; Reconciliation)During Floppy Company's first two years of operations, the company reportednet operating income as follows (absorption costing basis):Year 1Year 2P1,000,000P1,500,000Sales (at P50 per unit)Less cost of goods sold:Beginning inventoryAdd cost of goods manufactured(at P34 per unit)Goods available for saleLess ending inventory (at P34 per unit)Cost of goods soldGross marginLess selling and administrative expenses*Net operating income170,000850,0001,020,000850,000850,000170,000680,000320,000310,000P 10.0001,020,000480,000340,000P 140,000* P3 per unit variable; P250,000 fixed each year.

The income statement is the one in which all the revenue and expenses incurred by the company are…

Required: 1. Prepare an income statement for each year in the contribution format using variable costing. Reconcile the absorption costing and variable costing net operating income figures for each year.

Required: 1. Prepare an income statement for each year in the contribution format using variable costing. Reconcile the absorption costing and variable costing net operating income figures for each year.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 22BEA: Inventory Valuation under Variable Costing Refer to the data for Judson Company above. Required: 1....

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