Great Outdoze Company manufactures sleeping bags, which sell for $66.30 each. The variable costs of...
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Great Outdoze Company manufactures sleeping bags, which sell for $66.30 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $19.00 9.30 8.10 Budgeted fixed overhead in 20x1 was $170,400 and budgeted production was 24,000 sleeping bags. The year's actual production was 24,000 units, of which 20100 were sold. Variable selling and administrative costs were $1.80 per unit sold; fixed selling and administrative costs were $26,000. Required 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare operating income statements for the year using absorption costing. 2-b. Prepare operating income statements for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method
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