Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the...
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Accounting
Security Technology Incorporated STI is a manufacturer of an electronic control system used in the manufacture of certain specialduty auto transmissions used primarily for police and military applications. The part sells for $ per unit and STI had sales of units in the current year, STI had no inventory on hand at the beginning of and is projecting sales of units in STI is planning the same production level for as in units. The variable manufacturing costs for STI are $ and the variable selling costs are only $ per unit. The fixed manufacturing costs are $ per year, and the fixed selling costs are $ per year.
Required:
Prepare an income statement for each year using full costing.
Prepare an income statement for each year using variable costing.
Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods.
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