Assignment 2 Costing Lecture 2
Exercise for absorption and variable costing
During 2019. NuRev Inc. had $10,000 in Sales Commission. $2,000 in administrative costs of which $800
is fixed. They sold 8,500 units and produced 10,000 units. Their selling price per unit was $45. Direct
materials was $10. Direct Labor $7 and Variable Overhead was $3.50. Fixed Overhead amounted to
$7,500.
Prepare an Income Statement under Absorption and Variable Costing (20 pts)
ABSORPTION INCOME STATEMENT
Sales Revenue = 8,500 units sold x $45 per unit
= $382,500
Cost of Goods Sold = 8,500 x $21.25
=180.625
