Play Zone manufactures video games that it sells for $42 each. The company uses a fixed manufacturin

Play Zone manufactures video games that it sells for $42 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Play Zone's first two months in business during 2018: E: (Click the icon to view the data.) Data Table Read the requirements. Х Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. October November October 2018 November 2018 Sales 1,200 units 2,400 units 3,000 units 2,400 units Production Absorption costing $ 21 $ Variable costing 15 Absorption costing $ 21 $ Variable costing Variable manufacturing cost per game $ 15 $ 15 Total product cost per game 15 Requirement 2a. Prepare monthly income statements for October and November, including columns for each month and a total colun Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 14,400 10,000 14,400 10,000 Requirements Play Zone Absorption Costing Income Statement October 2018 November 2018 Print Done Total Net Sales Revenue Variable Costs Fixed Costs Gross Profit Operating Income 1. Compute the product cost per game prouuceu unuer ausurpuron cosury anu under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: a. absorption costing. b. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. Choose from any list or enter any number in the input fields and then click Check Answer. 6 parts Check Answer remaining

 

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