In the feild that does not have a dollar sign , label what the cost is
Absorption and Variable Costing Income Statements for Two Months and Analysis
During the first month of operations ended January 31, 2015, Hip and Conscious Clothing Company produced 55,500 designer cowboy hats, of which 51,450 were sold. Operating data for the month are summarized as follows:
During February, Hip and Conscious Clothing produced 47,400 designer cowboy hats and sold 51,450 cowboy hats. Operating data for February are summarized as follows:
Required:
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1a. Prepare an income statement for January using the absorption costing concept. Enter all amounts as positive numbers.
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1b. Prepare an income statement for February using the absorption costing concept. Enter all amounts as positive numbers.
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2a. Prepare an income statement for January using the variable costing concept. Enter all amounts as positive numbers.
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2b. Prepare an income statement for February using the variable costing concept. Enter all amounts as positive numbers.
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3a. For January, income from operations reported under costing is less than costing due to part of manufacturing costs that are expensed.
3b. When large changes in inventory levels occur from one period to the next, it is possible for management to misinterpret such increases (or decreases) in income from operations as due to changes in:
- costs.
- prices.
- sales volume.
- “sales volume”, “prices” and “costs” are correct.
- None of these choices is correct.
The correct answer is:
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