Full versus Variable Costing Stultz Manufacturing has the following information for the years ended December 31, 2009, and December 31, 2010:
| 2009 | 2010 |
Units |
|
|
Beginning inventory (units) | 400 |
|
Price | $90 | $90 |
Units sold | 1,000 | 1,900 |
Actual production (units) | 1,200 | 1,500 |
Budgeted production (units) | 1,200 | 1,500 |
Unit variable costs |
|
|
Manufacturing | $30 | $30 |
Selling and administrative | $5 | $5 |
Fixed costs |
|
|
Manufacturing | $24,000 | $30,000 |
Selling and administrative | $10,000 | $10,000 |
Required
1. Prepare the variable-cost and full-cost income statements for 2009 and 2010.
2. Prepare a reconciliation and explanation for the differences between full-cost and variable-cost operating income for both years.
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