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:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Conditioned Stimulus

A stimulus that was neutral at first but becomes associated with an involuntary response through conditioning.

Reinforcement Theory

A theory that states that behavior is a function of its consequences and is determined exclusively by environmental factors such as external stimuli and other reinforcers.

Dispute

A disagreement or argument, typically one that is prolonged, public, and heated.