PA5 5 Comparing Full Absorption and Variable Costing Complete Solution

Question: #943

PA5-5 Comparing Full Absorption and Variable Costing [LO 5S-1]

Consider the following information for Presidio Inc.'s most recent year of operations. Additional information for Presidio’s most recent year of operations follows:

Number of units produced 2,000
Number of units sold 1,300
Sales price per unit $ 650.00
Direct materials per unit 60.00
Direct labor per unit 90.00
Variable manufacturing overhead per unit 40.00
Fixed manufacturing overhead per unit ($235,000 ÷ 2,000 units) 117.50
Total variable selling expenses ($10 per unit sold) 13,000.00
Total fixed general and administrative expenses 70,000.00

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Required :
2. Complete a full absorption costing income statement and a variable costing income statement for Presidio. Assume there was no beginning inventory.

3. Compute the difference in profit between full absorption costing and variable costing.