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 | $ | 38 | per unit |
| Direct labor | $ | 46 | per unit |
| Overhead costs | | | |
| Variable overhead | $ | 6 | per unit |
| Fixed overhead per year | $ | 196,000 | per year |
| Selling and administrative expenses | | | |
| Variable | $ | 36 | per unit |
| Fixed | $ | 236,000 | per year |
| Units produced and sold | | 24,500 | units |
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1. Prepare an income statement for the year usingabsorption costing
2. Prepare an income statement for the year usingvariable costing.
Prepare an income statement for the year using absorptioncosting.
| Required 1 |
| | REY COMPANY | | Absorption Costing IncomeStatement | | Sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net income (loss) | |
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Prepare an income statement for the year using variablecosting.
| Required 2 |
| | REY COMPANY | | Variable Costing Income Statement | | | | | | | | | | | | | | | | | | | 0 | | | | | | | | | | | | | | 0 | | Net income (loss) | |
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