Using variable costing and absorbtion costing
The cheif executive officer, of Richards Corp. attended a conference in which one of hte sessions was devoted to variable costing. The CEO was inpressed by the presentation and has asked that that the following data of Richards Corp. be used to prepare comparative statements using variable costing and the companies absorption costing. The data follow:
Direct materials…..$90,000
Direct Laobr ……$ 120,000
Variable facroty overhead…..$ 60,000
Fixed facroty overhead…..$ 150,000
Fixed marketing and admin expenses ….$ 180,000
The factory produced 80,000 units during the period, and 70,000 units were sold for $700,000.
1. Prepare an income statment using variable costing
2. Prepare and income statment using absorbtion costing
