During the first year of operations, 18,000 units were manufactured and 13,500 units were sold.On August 31, Olympic Inc.prepared the following income statement based on the variable costing concept:
Olympic Inc.
Variable Costing Income Statement
For Year Ended August 31, 20--
Determine the unit cost of goods manufactured, based on a the variable costing concept and b the absorption costing concept.
Definitions:
Merchandising Companies
Companies that purchase goods in a finished condition and resell them at a profit without further processing.
Operating Cycles
Operating cycles refer to the average period of time it takes for a business to convert its inventory to sales revenue and then to cash.
Profit Margins
A financial metric measuring the amount of net income generated as a percentage of revenue, reflecting the profitability of a business.
Perpetual Inventory System
A method of maintaining inventory records where updates are made continuously after each purchase or sale.
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