Accounting Methods for Income Statements

Cam Pruet Use the information below to prepare an income statement using both variable and absorption costing methods. You will need to complete "Absoprtion Costing Unit Product Cost" in order to complete both income statements. Be sure to fill in all empty boxes with Ace Manufacturing Per AircrafPer Month Selling Price$150,000 Direct Materials$25,000 Direct Labor$4,000 Variable Manufacturing Overhead$1,000 Fixed Manufacturing Overhead$80,000 Variable selling and administrative expenses$15,000 Fixed selling and administrative expenses$25,000 Ace Manufacturing JanuaryFebruaryMarch Beginning Inventory001 Units produced124 Units sold115 Ending Inventory010 Selling and Administrative Expenses JanuaryFebruaryMarch Variable selling and administrative expenses$15,000$15,000$75,000 Fixed selling and administrative expenses$25,000$25,000$25,000 Total selling and administrative expenses$40,000$40,000$100,000 In the space below, briefly explain the difference between the outcomes of using variable an Instructions the appropriate text or value.When you are done, answer the questions below. Variable costing and absorption costing are two different methods of accounting for the costs lower cost of goods sold and higher reported profits. Absorption costing includes both variabl more accurate reflection of total production costs. The choice between the two methods can