Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

complete all 4 requriments please Requirements 1. If EGL sells all 300,000 bulbs produced, what would be the effect on operating income of using each

complete all 4 requriments please image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Requirements 1. If EGL sells all 300,000 bulbs produced, what would be the effect on operating income of using each type of capacity as a basis for calculating manufacturing cost per unit? 2. Compare the results of operating income at different capacity levels when 225,000 bulbs are sold and when 300,000 bulbs are sold. What conclusion can you draw from the comparison? 3. Using the original data (that is, 300,000 units produced and 225,000 units sold) if EGL had used the proration approach to allocate the production-volume variance, what would operating income have been under each level of capacity? (Assume that there is no ending work in process.) Data table Reference Enetgy Glow Light (EGL), a producer of energy-efficient light bulbs, expects that demand will increase markedly over the next decade Due to the high foxed costs involved in the business. EGL. has decided to evaluate its financial performance using absorption costing income The production volume variance is written off to cost of goods sold The variable cost of production is $260 per bubb Fixed manufacturing costs ate $1,170,000 per year Variable and fixed sehling and administrative expenses are $0,30 per bub sold and $260,000, respectively Because ts light bulbs are currently popular with ervironmentally conscious customers, EGL. can sell the bubs for $960 each EGL. is deciding among various concepts of capacty for calculating the cost of each unit produced (Click the icon to view the capacity intormation) Click the icon to view amounts previously calculated by EGL) Read the cequitements Requirement 1. If EGL sells all 300,000 bulbs produced, what would be the offect on operating income of using each type of capacty as a bass for calculating manutacturing cost per unit? (Label each variance as tavorable (F) or untavorable (U))

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Letter Of Credit Learners Guide To Letter Of Credit

Authors: Nisha S Koshal

1946822078, 978-1946822079

More Books

Students also viewed these Accounting questions