Problem: Mekong Corp. reported the following information for the most recent years ended:
Year 1 Year 2
Production units 54,000 50,625
Sales price per unit $45.00 $45.00
Units sold 50,000 53,000
Direct Materials per unit $ 15.00 $ 15.00
Direct Labor per unit $ 12.00 $ 12.00
Variable Manufacturing OH per unit $ 8.00 $ 8.00
Fixed Manufacturing OH costs $ 81,000 $ 81,000
Variable sell & admin costs per unit $ 4.00 $ 4.00
Fixed sell & admin costs $ 50,000 $ 50,000
There was no beginning inventory in Year 1.
Prepare Income Statements for each year (Year 1 and Year 2) using Full Costing.