Blatt Company, a Manufacturer of Slippers, Began Operations on June

Essay

Blatt Company, a manufacturer of slippers, began operations on June 1 of the current year. During this time, the company produced 210,000 units and sold 185,000 units at a sales price of $40 per unit. Cost information for this period is shown in the following table:
$$\begin{array}{l}\text { Production costs }\\\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 5.00 \text { per unit } \\\hline \text { Direct labor } & \$ 4.75 \text { per unit } \\\hline \text { Variable overhead } & \$ 302,000 \text { in total } \\\hline \text { Fixed overhead } & \$ 405,000 \text { in total } \\\hline \text { Non-production costs } & \\\hline \text { Variable selling and administrative } & \$ 9,000 \text { in total } \\\hline \text { Fixed selling and administrative } & \$ 25,000 \text { in total } \\\hline\end{array}\end{array}$$ a. Prepare Blatt's December 31st income statement for the current year under absorption costing.
b. Prepare Blatt's December 31st income statement for the current year under variable costing.