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16 Question 3 Absorbo Company makes and sells computer stands for the home office market. The following information is available regarding the company's operations, sales,
16 Question 3 Absorbo Company makes and sells computer stands for the home office market. The following information is available regarding the company's operations, sales, and costs. 2008 (Actual) 2009 (Expected) Sales Quantity 54,000 units 54,000 units Revenue $ 13,500,000 $ 13,500,000 Production Quantity 60.00 50.000 units Costs Cost of goods manufactured $11,800,000 $ 10,250,000 Fixed expenses Selling and administrative S 300,000 $ 300,000 Net income (absorption costing) ? $ 560,000 Fixed manufacturing costs deferred in inventory $ 100,000 Fixed manufacturing costs released from inventory $ 0 $ 250,000 Note: A unil variable costs were assumed in 2000 to remain at their 2008 lovels. In addition, fxed manufacturing costs were also assumed to be the same in 2009 as in 2008 Required a. Calculate the variable costing net income for 2009 by adjusting the absorption costing net income. b. Determine the following: 1) Fixed manufacturing cost per unit in 2009 ID) Total fixed manufacturing costs for 2009 ii) Contribution margin for 2009 c. Prepare a variable costing income statement for 2009 showing the variable selling, variable manufacturing, and fixed selling costs. 3 6 6 4
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