Exercise-2 (Variable costing income statement, reconciliation of net operating income)
Posted in: Variable and absorption costing (exercises)
The following is the absorption costing income statement of Alpha Manufacturing Company for the year ended December 31, 2016:
Fixed selling and administrative expenses are $600,000. Variable selling and administrative expenses are $6 per unit sold. The unit product cost under absorption costing is computed as follows:
- Prepare an income statement of Alpha Manufacturing Company using variable costing system.
- Reconcile any difference in net operating income figure under variable costing system and under absorption costing system.
(1). Variable costing income statement:
(2) Reconciliation of net operating income:
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