The Dorset Corporation produces and sells a single product. The following data refer to the...
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Accounting
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced Units sold Selling price per unit $ Selling and administrative expenses: Variable per unit $ Fixed per year $ Manufacturing costs: Direct materials cost per unit $ Direct labor cost per unit $ Variable manufacturing overhead cost per unit $ Fixed manufacturing overhead per year $ Assume that direct labor is a variable cost. Required: a Compute the unit product cost under both the absorption costing and variable costing approaches. b Prepare an income statement for the year using absorption costing. c Prepare an income statement for the year using variable costing. d Reconcile the absorption costing and variable costing net operating income figures in b and c above.
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:
Beginning inventory
Units produced
Units sold
Selling price per unit $
Selling and administrative expenses:
Variable per unit $
Fixed per year $
Manufacturing costs:
Direct materials cost per unit $
Direct labor cost per unit $
Variable manufacturing overhead cost per unit $
Fixed manufacturing overhead per year $
Assume that direct labor is a variable cost.
Required:
a Compute the unit product cost under both the absorption costing and variable costing approaches.
b Prepare an income statement for the year using absorption costing.
c Prepare an income statement for the year using variable costing.
d Reconcile the absorption costing and variable costing net operating income figures in b and c above.
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