exercise 2.51 portlan security company sells a security system key pad for $ 400

ID: 2372252 • Letter: E

Question

exercise 2.51 portlan security company sells a

security system key pad for $ 400 per unit this

product has the following cost

direct material $ 164,00

dirct labor 70.80

manufacturing overhead based on planned production of 5,000

units :

variabl 31.20

fixed 28.00

selling and adminstrative costs based on 6.500 units sold

variabl 20.80

fixed 14.00 294 per unit

this year 1500 units were in begining finished goods inventory ,

5,000 units were produced and 6,500 units were sold the begining

inventory was valued $ 266 per unit using varaible cost and

$294 using absorption costthere were no begining and

ending work in process invenotory

required

A prepare income statment for the year using varaible cost

contribution margin format

B would reprted operateing profits be more, less or the same if

absorption costing were used ? support your conclusion with income

statment using absorptioncost

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