Solved: Prepare a variable costing income statement, Accounting Basics

Prepare a variable costing income statement

Problem: Tiny Tim’s Bookcases- Variable Costing vs Full Costing

The information for Tiny Tim's Bookcases for the first two years of its operations is as follows:

    Selling price per unit                                                 $600

    Variable production costs per unit produced                $210

    Variable selling costs per unit per unit sold                  $12

    Fixed production costs                       $75,000

    Fixed selling and administrative expenses                   $46,000

    Units sold each year                                                 1,000    units

    Annual production in units:
            2010                       1,000    units

            2011                                                               1,250    units

Part I: Compute the unit product cost under full (absorption) costing for 2010.

Part II: Compute the unit product cost under variable costing for 2010.

Part III: Prepare a variable costing income statement for 2010. No statement heading is required.

Part IV: Prepare a full (absorption) costing income statement for 2010. No statement heading is required.

Part V: Compute the unit product cost under full (absorption) costing for 2011.

Part VI: Compute the unit product cost under variable costing for 2011.

(If you could please show the steps and the work so I can gain full understanding of what I need to do.)

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Accounting Basics: Prepare a variable costing income statement

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Solution Preview :

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Accounting Basics: Prepare a variable costing income statement

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Accounting Basics: Prepare a variable costing income statement

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