Question

Question No. Four

X Limited Corporation making one product only, the standard cost of which is as follow:

	2016	2017	2018
Direct material	35,000	36000	48,000
Direct labor	30,000	33000	42,000
Variable manufacturing overhead	25,000	24000	54,000
Variable marketing costs	10 000	15000	14.000
Total variable costs	100 000	122000	158.000

- The fixed manufacturing overhead costs $300,000

- Fixed marketing costs $200,000

- The selling price $200 per unit sold

- The number of units produced and sold were:

Beginning inv. Production Sales Ending inv.	2016	2017	2018
	1000 5000 4000 ........	.......... 3000 ........ ........	3000 6000 ........ 1000

Required

1. Prepare income statements under variable, absorption and throughput costing for the year ended December 31, 2018.
2. Explain the difference of the results?

Answer 1

1. Prepare income statements under variable, absorption and throughput costing for the year ended December 31, 2018.

2. Explain the difference of the results?