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Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022

Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022
Transcribed Image Text:Security Technology Incorporated (STI) is a manufacturer of an electronic control system used in the manufacture of certain special- duty auto transmissions used primarily for police and military applications. The part sells for $46 per unit and STI had sales of 24,850 units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 28,550 units in 2022. STI is planning the same production level for 2022 as in 2021, 26,700 units. The variable manufacturing costs for STI are $17, and the variable selling costs are only $0.80 per unit. The fixed manufacturing costs are $160,200 per year, and the fixed selling costs are $670 per year. Required: 1. Prepare an income statement for each year using full costing. 2. Prepare an income statement for each year using variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costing methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INCORPORATED Full Costing Sales Less: Cost of goods sold Beginning inventory Cost of goods produced Available for sale Less: Ending inventory Cost of goods sold Gross margin Less: Selling and administrative costs Variable Fixed Operating income Income Statement 2021 2022
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