Kolb Company prepared its income statements for the current year using three alternative cost accounting systems as follows:
Required:
Explain your answers to the following questions:
• a. Match the following cost systems with alternatives A, B, and C: (1) standard full cost system; (2) actual absorption cost system; and (3) actual variable cost system.
- b. How much, if any, of the factory overhead cost was variable?
- c. What was the actual factory overhead cost incurred for the year?
- d. What were the nonfactory costs incurred for the year?
- e. What percentage was actual factory volume for the year to normal factory volume?
- f. Which of the alternative statements was not prepared in accordance with generally accepted accounting principles?
• g. How did actual direct material cost compare with planned direct material cost?