Question: abc company incurs the following costs for its beverage mix...
ABC company incurs the following costs for its beverage mix in March 2019:
Direct material cost per case $6.00
Direct labour cost per case ` $3.00
Variable manufacturing O/H cost per case $2.00
Sales commission per case $2.50
Total fixed manufacturing O/H expenses $50,000
Total fixed marketing and administrative expenses $25,000
ABC company produced 10,000 cases of the mix as planned but sold only 8,000 cases @ $30 per case. There were no beginning inventories.
a) What is the company’s inventoriable (product) cost under Absorption costing and Variable costing method?
b) Prepare an income statement for the company using Variable costing method.