Alice Williams, the founder of Anthony, Inc. was previously a researcher at the University of Florida in the Veterinary School. She discovered a compound that prevents ticks, fleas, and heartworms from infecting dogs and that can be added as a powder to a dog's food. more importantly, dogs love it. There is no longer a problem persuading dogs to take their preventitive medication.

Ford File Edit View Insert Format Font Tools Table Window & Absorption vs Variable case.docx (Q- Search in Document ne Layout Document Elements Tables Charts SmartArt Review Font Paragraph Styles Insert Themes ady) 16 A A A U Wise WAT Styles Text Box Themes 2013 4 56 mi Absorption vs Variable (Contribution Method) Costing Anthony, Inc. Alice Williams, the founder of Anthony, Inc. was previously a researcher at the University of Florida in the Veterinary School. She discovered a compound that prevents, ticks, fleas, and heartworms from Infecting dogs and that can be added as a powder to a dog's food. More importantly, dogs love it. There is no longer a problem persuading dogs to take their preventive medication. Alice is involved in a number of other projects and does not want to run the company she has set up to produce and market the new product. She has invested in setting up the business and has hired a general manager to oversee operations. She has created the following compensation plan for her manager Management Incentive Plan Executive Compensation: The General Manager will be paid a monthly bonus equal to 10% of the Income from Operations In the first month of operations, the company had the following results: Performance Report: December 2018 Units: produced 30.000; sold 20,000, Selling Price: $20 per unit Beginning inventory 0 (zero) units. Variable Costs: Direct Materials per unit Direct Labor 53 per unit Variable Manufacturing Overhead Si per unit Variable Selline and Administrative Costs $2 per unit Fixed Costs Manufacturing Overhead $120.000 per month Selling and Administrative Costs $15,000 per month Required Alice has asked you to help her calculate the company income from Operations for the first month You tell het it can be done in two ways The Ful Abxo focion Costing approach or the contribution Absorption vs Variable case.docx OLI a Search in Document 10 Document Elements Tables Charts SmartArt Review Layout Font Paragraph Styles Insert Theme: ody) 16 AR IA . U ABC Styles Text Box Themes RES 21 41 RES 61 170 A Management Incentive Plan Executive Compensation: The General Manager will be paid a monthly bonus equal to 10% of the Income from Operations In the first month of operations, the company had the following results: Performance Report: December, 2018 Units: produced 30,000, sold 20,000; Selling Price: $20 per unit Beginning inventory 0 (zero) units. Variable Costs: Direct Materials $5 per unit Direct Labor $3 per unit Variable Manufacturing Overhead $1 per unit Variable Selling and Administrative Costs $2 per unit Fixed Costs: Manufacturing Overhead $120,000 per month Selling and Administrative Costs $15,000 per month Required: Alice has asked you to help her calculate the company's Income from Operations for the first month. You tell her it can be done in two ways: The Full Absorption Costing approach or the Contribution Method approach. 1 She asks you to show her both methods and explain the benefits and disadvantages of each 2. She also asks you to recommend which one she should use a. based on this month's performance alone, and b. based on long term projections for a successful business For (a) und (b) above, state your reasons 012 Print Layout View Sec 1 Pages 1 of 1 100%