Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income

Question:

Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Tech Helpers provides a personal computer maintenance service that is sold for \($100.\) The variable and fixed cost data are as follows:

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During 2015, 4,000 service contracts were started and 5,000 service contracts were completed. At the beginning of 2016, Tech Helpers had 1,000 service contracts in process at a per-unit cost of \($90\) in beginning work-in-process inventory.

Required

a. Calculate reported income for management.

b. Calculate reported income for the bank.

c. Reconcile the two income amounts.

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Managerial Accounting For Undergraduates

ISBN: 9781618531124

1st Edition

Authors: Christensen, Theodore E. Hobson, L. Scott Wallace, James S.

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