The EG Company produces and sells one product: a microwave oven.The following data refer to the year just completed:

Required:

a) Compute the cost of a single unit of product 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 operating income figures in b) and c) above.

Question

The EG Company produces and sells one product: a microwave oven.The following data refer to the year just completed:

Required:

a) Compute the cost of a single unit of product 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 operating income figures in b) and c) above.

Quizplus · Accepted Answer

The Answer of The EG Company produces and sells one product: a microwave oven.The following data refer to the year just completed:

Required:

a) Compute the cost of a single unit of product 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 operating income figures in b) and c) above.

The EG Company Produces and Sells One Product: a Microwave