Roller Paint Co. reported the following data for the month of September. There were no beginning inventories and all units were completed no work in process). In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit.
a) Prepare a variable costing income statement.
b) Prepare an absorption costing income statement.
c) Briefly explain why there is a difference in income from operations between the two methods.

Question

Roller Paint Co. reported the following data for the month of September. There were no beginning inventories and all units were completed no work in process).  In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit.
a) Prepare a variable costing income statement.
b) Prepare an absorption costing income statement.
c) Briefly explain why there is a difference in income from operations between the two methods.

Quizplus · Accepted Answer

The Answer of Roller Paint Co. reported the following data for the month of September. There were no beginning inventories and all units were completed no work in process).  In the month of September, 28,000 of the 30,000 units manufactured were sold at a price of $80 per unit.
a) Prepare a variable costing income statement.
b) Prepare an absorption costing income statement.
c) Briefly explain why there is a difference in income from operations between the two methods.