Jensen Company produced 10,000 cases of cookies this year. It sold 9,500 cases for £10 each. There were no beginning inventories. Variable manufacturing costs were £30,000, and fixed manufacturing expenses were £50,000. Selling and administrative expenses were £10,000, all fixed.
Required:
a.
Prepare income statements using the variable costing and absorption costing.
b.
Reconcile the net income under absorption and variable costing.

Question

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The Answer of Jensen Company produced 10,000 cases of cookies this year. It sold 9,500 cases for £10 each. There were no beginning inventories. Variable manufacturing costs were £30,000, and fixed manufacturing expenses were £50,000. Selling and administrative expenses were £10,000, all fixed.
Required:
a.
Prepare income statements using the variable costing and absorption costing.
b.
Reconcile the net income under absorption and variable costing.

Jensen Company Produced 10,000 Cases of Cookies This Year