Hadlee Company Sells Its Products for $66 Each Required:
A

Essay

Hadlee Company sells its products for $66 each.The current production level is 25 000 units,although only 20 000 units are anticipated to be sold.
Unit manufacturing costs are:
$\begin{array} { l l } \text { Direct materials } & \$ 12.00 \\ \text { Direct manufacturing labour } & \$ 18.00 \\ \text { Variable manufacturing costs } & \$ 9.00 \\ \text { Total fixed manufacturing costs } & \$ 180000\\\text {Marketing expenses}&\text { \$ 6.00 per unit, plus \$ 60000 per year} \end{array}$

Required:
a.Prepare an income statement using absorption costing.
b.Prepare an income statement using variable costing.
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