E22-11 The 20X4 data that follow pertain to Oakley, a manufacturer of solid oak coffee tables (Oakley
Question:
E22-11 The 20X4 data that follow pertain to Oakley, a manufacturer of solid oak coffee tables (Oakley has no beginning inventories in January 20X4.) Sale price $350 Fixed manufacturing Variable manufacturing overhead $2,000,000 expense per table 275 Fixed operating expense...... 250,000 Sales commission expense per table 40 Number of tables produced.. Number of tables sold......... 100,000 85,000 Required 1. Prepare both conventional (absorption costing) and contribution margin (variable cost- ing income statements for Oakley. 2. Which statement shows the higher operating income? Why? 3. Oakley's marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 100,000 tables. Should the company go ahead with the promo- tion? Give your reason.
Step by Step Answer:
Accounting
ISBN: 9780130906991
5th Edition
Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones