Please show step on how to find answers for question below. Thank you.
Question #1
Consider the following information:
Q1
Q2
Q3
Beginning inventory (units)
0
300
300
Actual units produced
1000
800
1250
Budgeted units to be produced
1000
1000
1000
Units sold
700
800
1500
Manufacturing costs per unit produced
$900
$900
$900
Marketing costs per unit sold
$600
$600
$600
Fixed manufacturing costs
$400000
$400000
$400000
Fixed marketing costs
$140000
$140000
$140000
Selling price per unit
$2500
$2500
$2500
There are no price efficiency or spending variances and any production-volume variance is directly written off to cost of goods in the
quarter in which it occurs.
a) Prepare income statements for Q1 Q2 and Q3 using variable costing and absorption costing.
b) Explain the differences in operating income between the two costing systems for each quarter. Be specific!