Managerial Accounting Devry University Week 4 Homework

Refer to the Speedy Lube data in S6-8. Use the high-low method to determine the variable
and fi xed cost components of Speedy Lube’s operating costs. Use this information to project the monthly operating costs for a month in which the company performs 3,600 oil changes.

S6-17 Prepare income statements using variable costing and absorption
costing with no change in inventory levels (Learning Objective 6)
O’Malley’s Products manufactures a single product. Cost, sales, and production
information for the company and its single product is as follows:
• Selling price per unit is $60
• Variable manufacturing costs per unit manufactured (includes DM, DL & variable MOH) $32
• Variable operating expenses per unit sold $1
• Fixed manufacturing overhead (MOH) in total for the year $120,000
• Fixed operating expenses in total for the year $90,000
• Units manufactured and sold for the year 10,000 units
Requirements
1. Prepare an income statement for the upcoming year using variable costing.
2. Prepare an income statement for the upcoming year using absorption costing.

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