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:

Proximodistal

Describes the pattern of development in children where growth starts at the center of the body and moves towards the extremities.

Central Axis

An imaginary line that is central to an object or structure, providing a point of symmetry or balance.

Axon

A long, slender projection of a nerve cell that typically conducts electrical impulses away from the neuron's cell body.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.