April May Unit dat Beginning inventory Production 500 475 Sale 350 595 Variable costs Manufacturing cost per unit produced 8.500 5 8.500 Operating

1. Prepare for April and May income statements for Fast Track Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under under variable costing and absorption costing.
Fast Track Motors assembles and sells motor vehicles and uses standard costing Actual data relating to April and May 2014 are as follows
Click the icon to view the data . )
The selling price per vehicle is
Vehicle is $22 000 . The budgeted level of production used to calculate the by
dgeted fixed manufacturing cost per unit is 500 units . There are
no price , efficiency , or spending variances Any production – volume
variance is written off to cost of goods sold in the month
the in which it occurs
Requirements
1 . Prepare April and May 2014 income state
statements for Fast Track Motors under ( a ) variable costing and ( b ) absorption costing
2 . Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing
( b ) Prepare April and May 2014 income statements for FastTrack
rack Motors under absorption costing Complete the top half of the income statement for each
month first , then complete the bottom portion . Enter a to " for
any zero
balance accounts Label any variances as favorable ( F ) or unfavorable ( 1 ) . If an account does not have a variance , do not select a label . )
April 2014
May 2014

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