Ivy, SA., produces a single product that sells for £60 per unit. There were no inventories of work in process or finished goods. Costs for the year were as follows: During the first three months of the year, production and sales in units were as follows: The company uses an actual cost system. There were no work-in-process inventories at the end of any month, and the company uses FIFO costing.
Required:
a.
Determine the unit cost of production under variable costing for each of the three months.
b.
Determine the unit cost of production under absorption costing for each of the three months.
c.
Determine income under variable costing for each of the three months.
d.
Determine income under absorption costing for each of the three months.

Question

Ivy, SA., produces a single product that sells for £60 per unit. There were no inventories of work in process or finished goods. Costs for the year were as follows:  During the first three months of the year, production and sales in units were as follows:  The company uses an actual cost system. There were no work-in-process inventories at the end of any month, and the company uses FIFO costing.
Required: 
a.
Determine the unit cost of production under variable costing for each of the three months.
b.
Determine the unit cost of production under absorption costing for each of the three months.
c.
Determine income under variable costing for each of the three months.
d.
Determine income under absorption costing for each of the three months.

Quizplus · Accepted Answer

The Answer of Ivy, SA., produces a single product that sells for £60 per unit. There were no inventories of work in process or finished goods. Costs for the year were as follows:  During the first three months of the year, production and sales in units were as follows:  The company uses an actual cost system. There were no work-in-process inventories at the end of any month, and the company uses FIFO costing.
Required: 
a.
Determine the unit cost of production under variable costing for each of the three months.
b.
Determine the unit cost of production under absorption costing for each of the three months.
c.
Determine income under variable costing for each of the three months.
d.
Determine income under absorption costing for each of the three months.

Ivy, SA, Produces a Single Product That Sells for £60 Per