Shelko Corporation Manufactures and Sells One Product

question 16

Essay

Shelko Corporation manufactures and sells one product. The following information pertains to the company's first year of operations:
The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 42,000 units and sold 37,000 units. The company's only product is sold for $272 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. Compute the unit product cost for the year and prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and absorption costing net incomes.

---

Definitions:

Viewer Profiles

Information and data collected about viewers or users that describe their habits, preferences, and demographic details to inform content creation, marketing strategies, and personalized experiences.

Digital Technologies

The range of electronic tools, systems, devices, and resources that generate, store, or process data, including social media, online gaming, multimedia, and mobile phones.

Generation Z

The demographic cohort following Generation Y, typically defined as those born from the mid-1990s to the early 2010s, known for being digital natives.

Social Media

Media content used for social interactions such as YouTube, Facebook, and Twitter.