help s 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 $61 per unit and STI had sales of 24,300units in the current year, 2021. STI had no inventory on hand at the beginning of 2021 and is projecting sales of 26,900 units in2022. STI is planning the same production level for 2022 as in 2021, 25,600 units. The variable manufacturing costs for STI are$22, and the variable selling costs are only $0.40 per unit. The fixed manufacturing costs are $128,000 per year, and the fixedselling costs are $560 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 3Prepare a reconciliation of the difference each year in the operating income resulting from the full and variable costingmethods. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your "Fixedoverhead rate" answers to 2 decimal places, and other final answers to nearest whole dollar amount.)SECURITY TECHNOLOGY INCORPORATEDReconciling Difference in Operating IncomeBetween Full and Variable Costing2021Change in inventory in unitsMultiply times fixed overhead rateDifference in operating income$$745,4203,400.002,534,428,0002022935,980$ (1,600.00)$(1,497,568,000)

Variable costing consider the variable manufacturing overhead as product cost and fixed…

Answered: Security Technology Incorporated (STI)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Dublin Chips is a manufacturer of prototype chips based in Dublin, Ireland. Next year, in 2018, Dublin Chips expects to deliver 615 prototype chips at an average price of $95,000. Dublin Chips’ marketing vice president forecasts growth of 65 prototype chips per year through 2024. That is, demand will be 615 in 2018, 680 in 2019, 745 in 2020, and so on. The plant cannot produce more than 585 prototype chips annually. To meet future demand, Dublin Chips must either modernize the plant or replace it. The old equipment is fully depreciated and can be sold for $4,200,000 if the plant is replaced. If the plant is modernized, the costs to modernize it are to be capitalized and depreciated over the useful life of the updated plant. The old equipment is retained as part of the modernize alternative. The following data on the two options are available: Modernize…
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