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Rey Company’s single product sells at a price of $234 per unit. Data for its single...

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Accounting

Rey Company’s single product sells at a price of $234 per unit.Data for its single product for its first year of operationsfollow.

Direct materials$38per unit
Direct labor$46per unit
Overhead costs
Variable overhead$6per unit
Fixed overhead per year$196,000per year
Selling and administrative expenses
Variable$36per unit
Fixed$236,000per year
Units produced and sold24,500units


1. Prepare an income statement for the year usingabsorption costing
2. Prepare an income statement for the year usingvariable costing.

  • Required 1
  • Required 2

Prepare an income statement for the year using absorptioncosting.

Required 1
REY COMPANY
Absorption Costing IncomeStatement
Sales
Net income (loss)
  • Required 1
  • Required 2

Prepare an income statement for the year using variablecosting.

Required 2
REY COMPANY
Variable Costing Income Statement
0
0
Net income (loss)

Answer & Explanation Solved by verified expert
3.9 Ratings (718 Votes)
Ans 1 In Absorption costing method the cost of goods sold is the sum of all manufacturing costs whether it is fixed or variable REY COMPANY Absorption Costing Income Statement PARTICULARS Amount Sales 24500 234 5733000 Less Cost of goods sold Direct materials 38    See Answer
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