Brindle Arts uses Variable Costing for internal purposes, but uses Absorption Costing for their financial reports. Calculate unit product costs for both methods, prepare both income statements and then show why there is a difference between the two methods. Quarter 1 Quarter 2 Beginning inventory - 1,500 Units produced 18,500 18,775 Units sold 17,000 18,750 Ending inventory 1,500 1,525 Selling price per unit $145.00 Variable costs per unit: Direct materials $30.00 Direct labor $25.00 Var. MOH $10.00 Var. S&A per unit $14.50 Fixed costs: Fixed MOH $600,000 Fixed Selling and Admin. $210,000

Peppy knows a lot about marketing, but not much about the legal or financial aspects of starting a new business. he wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting peppy's pizzazzeria up and running. peppy should: trust his basic instincts and try to put it together without the advice of lawyers and accountants. delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year. immediately hire full-time lawyers and accountants for his staff. consult with a lawyer and accountant even though the budget is tight.