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The annual data that follows pertain to Goggles Only, a manufacturer of swimming goggles (the company had no beginning inventory): (Click the icon to
The annual data that follows pertain to Goggles Only, a manufacturer of swimming goggles (the company had no beginning inventory): (Click the icon to view the data.) Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Goggles Only for the year. 2. Which statement shows the higher operating income? Why? 3. The company marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 200,000 goggles. Should the company go ahead with the promotion? Give your reason. Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Goggles Only for the year. Begin with the conventional (absorption costing) income statement. Goggles Only Income Statement (Absorption Costing) For the Year Ended December 31 Less: Less: Operating expenses O Data Table Sales price.. Variable manufacturing expense per unit . Sales commission expense per unit . Fixed manufacturing overhead . Fixed operating expenses...... Number of goggles produced . Number of goggles sold Print 42 18 5 250,000 200,000 186,000 Done
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