Rey Company’s single product sells at a price of $234 per unit. Data for its single...

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Accounting

Rey Company’s single product sells at a price of $234 per unit.Data for its single product for its first year of operationsfollow.
Direct materials $ 38 per unit
Direct labor $ 46 per unit
Overhead costs
Variable overhead $ 6 per unit
Fixed overhead per year $ 196,000 per year
Selling and administrative expenses
Variable $ 36 per unit
Fixed $ 236,000 per year
Units produced and sold 24,500 units

1. Prepare an income statement for the year usingabsorption costing
2. Prepare an income statement for the year usingvariable costing.
Required 1
Required 2
Prepare an income statement for the year using absorptioncosting.
Required 1
REY COMPANY
Absorption Costing IncomeStatement
Sales
Net income (loss)
Required 1
Required 2
Prepare an income statement for the year using variablecosting.
Required 2
REY COMPANY
Variable Costing Income Statement
0
0
Net income (loss)

Answer & Explanation Solved by verified expert

3.9 Ratings (718 Votes)

Ans 1 In Absorption costing method the cost of goods sold is the sum of all manufacturing costs whether it is fixed or variable REY COMPANY Absorption Costing Income Statement PARTICULARS Amount Sales 24500 234 5733000 Less Cost of goods sold Direct materials 38 See Answer

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Direct materials	$	38	per unit
Direct labor	$	46	per unit
Overhead costs
Variable overhead	$	6	per unit
Fixed overhead per year	$	196,000	per year
Selling and administrative expenses
Variable	$	36	per unit
Fixed	$	236,000	per year
Units produced and sold		24,500	units