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Homework answers / question archive / This problem has been solved! See the answer Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting
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Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows.
| Sales (225 × $1,600) | $ | 360,000 | |
| Variable product cost (225 × $625) | 140,625 | ||
| Variable selling and administrative expenses (225 × $65) | 14,625 | ||
| Contribution margin | 204,750 | ||
| Fixed overhead cost | 56,250 | ||
| Fixed selling and administrative expense | 75,000 | ||
| Net income | $ | 73,500 |
The dollar difference in variable costing income and absorption costing income = ______ units X $______ fixed overhead per unit.
