Digital Edge Inc. assembles and sells MP3 players. The company began operations on May 1, 2010, and operated at 100% of capacity during the first month. The following data summarize the results for May:
a) What is the cost of goods sold using the absorption cost system?
b) What is the variable cost of goods sold using the variable costing concept?
- Sales (14,000 units) $1,820,000
- Production costs (18,000 units)
- Direct Materials $865,800
- Direct Labor 421,200
- Variable Factory Overhead 210,600
- Fixed Factory Overhead 140,400 1,638,000
- Selling and administrative expenses
- Variable selling and administrative expenses $254,800
- Foxed selling and administrative expenses 100,000 354,800