Response to the following problem:
The following data are available for Scream Company for the year ended December 31, 2015:
Sales 38,000 units
Sales price $50 per unit
Actual variable manufacturing costs $1,400,000
Actual fixed manufacturing costs $228,000
Actual variable nonmanufacturing costs $76,000
Actual fixed nonmanufacturing costs $135,000
Work-in-process inventory, January 1, 2015 0
Finished goods inventory, January 1, 2015 0
Direct materials inventory, January 1, 2015 0
Work-in-process inventory, December 31, 2015 0
Direct material inventory, December 31, 2015 0
Expected production 40,000 units
Actual production 40,000 units
Required:
A) Using the variable-costing approach, prepare an income statement for the year ended December 31, 2015. Assume actual fixed costs were equal to budgeted fixed costs.
B) Using the absorption-costing approach, prepare an income statement for the year ended December 31, 2015. Assume actual fixed costs were equal to budgeted fixed costs.