question archive Yale Company manufactures hair brushes that sell at wholesale for $3 per unit
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit
Subject:BusinessPrice: Bought3
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the pi year. These data summarize the current and prior year operations Prior Year Current Year Sales (2005) 2,700 units 4,91) units Production (2005) 3,800 units 3,80 units Production cost Factory-variable (per unit) 5.9.60 5.0.60 -fixed (2005) $1,900 Marketing-variable (per unit) $ 0.40 Administrative-fixed (2005) $ 500 $ 500 Required: 1 Prepare an income statement for each year based on full costing 2. Prepare an income statement for each year based on variable costing 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method $. 1.900 $ 0.40 Inces YALE COMPANY Full Costing Income Statement Prior Year $ Current Year 8.100 Sales Less Cost of goods sold Beginning inventory Cost of goods produced Variable Available for sale Loss Ending inventory ances 1.210 Cost of goods sold Gross margin Less Selling and administrative costs Variable Operating income SHE Preu 5 of 6 Next > Less Cost of goods sold Available for sale Cost of goods sold Contribution margin Less: Selling and administrative costs Operating income Required 1 Required 2 Required 3 Prepare a reconciliation of the difference each year in the operating income re variable costing method. (Negative amounts should be indicated by a minus to 2 decimal places. Enter your answers in thousands of dollars.) YALE COMPANY Reconciling Difference in Operating Income Between Full and Variable Costing Prior Year Current Year Change in inventory in units x fixed overhead rate Difference in operating income $ 0 $ 0 < Required 2 Required
