File A & Share Hind - Replace Select- Pyste 20210527111916D6101_Asg1-W2-ACCT7066_2030 (1) - Word (Product Activation failed Home Insert Design Layout References Mailings Review View Tell me what you want to do.. * Cut Calibr (Body - 12-A A Mar 4-12 1 A A Aabbccbd Rabbccbd Aabba Aabbcc AaB Aabbcc Aabbccod Aabbccod Aabbccod AaBbccdc Aabbocod Copy Formal Painte BIU - ali * Aay. A ,OP, 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis intense E... Strong Quote Clipboard Paragraph Question 3 Bectang, CEO of Creative Industries, is concerned about the recent volatility in the company's operating income. He believes that since the number of units sold has been fairly stable over the past three years that operating Income also should have been stable. Bectand asked Peter, Creative's inventory manager, to help his understand the issue. Peter reviewed the company's records and compiled the following changes to finished Goods Inventory (in units) for the years 2019, 2020, and 2021 Fon Slyes C Beginning inventory Production Sales Ending Inventory Year 2019 2020 2021 1,000 2,000 500 40,000 38,000 40,000 (39,000) (39,500) 139,500) 2,000 300 1,000 Peter also gathered the 2019 income statements prepared using absorption costing and variable custing, which follow $4,290,000 Income Statement-Absorption Costing Sales Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of goods sold Gross margin Selling expense Operating income Income Statement Variable Costing Sales Variable production expenses Variable selling expenses Contribution margin Foxed manufacturing expenses Foed selling experises Operating income 190,000) 13.420,000) (3.510,000) 780,000 (645,000) $ 135,000 $4,290.000 12,028,000) (195,000) 2,067,000 (1.520,000) (450,000) $ 97,000 Instructions: 1. Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing! Assume costs do not change from one year to the next. 2. Prepare variable and absorption costing income statements for 2020 and 2021 Page 3 of 3 51/ words 3 + 30% O | a: . 1A WE Desktop 27'C Hujan sedang AB 12:17 AM B/15/2021 File A & Share Hind - Replace Select- Pyste 20210527111916D6101_Asg1-W2-ACCT7066_2030 (1) - Word (Product Activation failed Home Insert Design Layout References Mailings Review View Tell me what you want to do.. * Cut Calibr (Body - 12-A A Mar 4-12 1 A A Aabbccbd Rabbccbd Aabba Aabbcc AaB Aabbcc Aabbccod Aabbccod Aabbccod AaBbccdc Aabbocod Copy Formal Painte BIU - ali * Aay. A ,OP, 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis intense E... Strong Quote Clipboard Paragraph Question 3 Bectang, CEO of Creative Industries, is concerned about the recent volatility in the company's operating income. He believes that since the number of units sold has been fairly stable over the past three years that operating Income also should have been stable. Bectand asked Peter, Creative's inventory manager, to help his understand the issue. Peter reviewed the company's records and compiled the following changes to finished Goods Inventory (in units) for the years 2019, 2020, and 2021 Fon Slyes C Beginning inventory Production Sales Ending Inventory Year 2019 2020 2021 1,000 2,000 500 40,000 38,000 40,000 (39,000) (39,500) 139,500) 2,000 300 1,000 Peter also gathered the 2019 income statements prepared using absorption costing and variable custing, which follow $4,290,000 Income Statement-Absorption Costing Sales Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of goods sold Gross margin Selling expense Operating income Income Statement Variable Costing Sales Variable production expenses Variable selling expenses Contribution margin Foxed manufacturing expenses Foed selling experises Operating income 190,000) 13.420,000) (3.510,000) 780,000 (645,000) $ 135,000 $4,290.000 12,028,000) (195,000) 2,067,000 (1.520,000) (450,000) $ 97,000 Instructions: 1. Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing! Assume costs do not change from one year to the next. 2. Prepare variable and absorption costing income statements for 2020 and 2021 Page 3 of 3 51/ words 3 + 30% O | a: . 1A WE Desktop 27'C Hujan sedang AB 12:17 AM B/15/2021
