Loker Corp

Loker Corp. makes and sells garden hoses in 50 ft. lengths. The following information is available for the year just ended, the company’s first year of operations:

Units produced: 8,000	Variable costs per unit:
Units sold: 6,000	Manufacturing (Direct Materials, Direct Labor, and Variable Overhead) - $12.00 (total) Selling and Admin. - $2.00
Selling price:$25.00 per unit
	Total fixed costs:
	Overhead - $7,200
	Selling and Admin.- $5,000

REQUIRED (You can use abbreviations if you wish. Organize your answers in a readable way using the columns and rows below.):

Compute the cost of one unit of product using absorption costing.
Compute the cost of one unit of product using variable costing.
Prepare an income statement for the year in the proper format using absorption costing.
Prepare an income statement for the year in the proper format using variable costing.
Provide a quantitative explanation/reconciliation of why the two net income amounts that you calculated above are different (or the same).

12 years ago

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