Randy Company Has Obtained the Following Data for the First

question 18

Essay

Randy Company has obtained the following data for the first year of operations:
$\begin{array}{ll}\text { Sales }&\$2,868,750\\\text { Direct materials and labor }&\$1,125,000\\\text { Variable manufacturing overhead } & \$ 431,250 \\\text { Fixed manufacturing overhead } & \$ 656,250 \\\text { Variable selling expenses } & \$ 337,500 \\\text { Fixed selling expenses } & \$ 131,250 \\\text { Units produced } & 125,000 \\\text { Units sold } & 112,500 \\\text { Units expected to be produced } & 125,000\end{array}$
Required:
A) Using variable costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.
B) Using absorption costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.

• A) Using variable costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.
• B) Using absorption costing, prepare an income statement for the first year of operations. Assume budgeted fixed costs were equal to actual fixed costs.

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Definitions:

Hummingbird

A small bird known for its ability to hover in mid-air thanks to rapid wing flapping, feeding primarily on nectar and playing a role in pollination.

Nectar

A sweet liquid produced by plants, which serves as a food source for pollinators such as bees and butterflies.

Optimal Foraging Hypothesis

A theory suggesting that animals will maximize their net energy intake per unit of foraging time, leading to behaviors that are most efficient in gaining resources.

Hummingbird

A small bird known for its ability to hover in mid-air due to rapid wing flapping and for feeding on nectar.