Stultz Manufacturing Has the Following Information for the Years Ended

question 80

Essay

Stultz Manufacturing has the following information for the years ended December 31, 2018, and December 31, 2019: $\begin{array}{lll}&2018&2019\\\text { Units }\\\text { Beginning Inventory } & 400 \\\text { Selling Price } & \$ 90 & \$ 90\\\text { Sold } & 1,000 & 1,900 \\\text { Actual Production } & 1,200 & 1,500 \\\text { Budgeted Production } & 1,200 & 1,500 \\\text { Unit Variable Costs } & &\\\text { Manufacturing } & \$ 30 & \$ 30 \\\text { Selling and Administrative } & \$ 5 & \$ 5 \\\text { Fixed Costs } & & & &\\\text { Manufacturing } & 24,000 & 30,000 \\\text { Selling and Administrative } & 10,000 & 10,000\end{array}$ The 2019 cost per unit was the same as in the year 2018.
Required:
1. Prepare the variable-cost and full-cost income statements for 2018 and 2019.
2. Prepare a reconciliation and explanation for the differences between full-cost and variable-cost operating income for both years.

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Definitions:

Fluctuated

Describes a process or value that has experienced changes, typically up and down, over a period of time.

Income Inequality

An imbalanced dispersion of income among participants in an economy on a household or individual basis.

Technological Innovation

The process of developing new technologies or improving existing ones to enhance productivity, efficiency, or overall value.

International Trade

The exchange of goods, services, and capital between countries and territories, influencing global economic activity.