Bruster Company sells its products for $66 each. The current production level is 25,000
units, although only 20,000 units are anticipated to be sold.
Unit manufacturing costs are:
Direct materials $12.00
Direct manufacturing labor $18.00
Variable manufacturing costs $9.00
Total fixed manufacturing costs $180,000
Marketing expenses $6.00 per unit, plus $60,000 per year
Required:
a. Prepare an income statement using absorption costing.
b. Prepare an income statement using variable costing
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