The chief executive officer of richards corp attended a


Using Variable costing and absorption costing.

The chief executive officer of Richards Corp. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Richards Corp. be used to prepare comparative statements using variable costing and the company's absorption costing. The data follow:

Direct Material..................................................... $90,000

Direct labor........................................................ 120,000

Variable factory overhead................................... 60,000

Fixed factory overhead....................................... 150,000

Fixed marketing and admin expense................... 180,000

The factory produced 80,000 units during the period, and 70,000 units were sold for $700,000.

1. Prepare an income statement using variable costing

2. Prepare an income statement using absorption costing.

 

(Round unit costs to three decimal places)

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Financial Accounting: The chief executive officer of richards corp attended a
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