Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fixed manufacturing costs are $10 per unit, and variable manufacturing costs are $25 per unit. Selling and administrative costs are $3 per unit variable and

image text in transcribed

Fixed manufacturing costs are $10 per unit, and variable manufacturing costs are $25 per unit. Selling and administrative costs are $3 per unit variable and $2 per unit Fixed. Production was 13.000 units, while sales were 12,000 units at a selling price of $75 per unit. Determine (a) whether variable costing operating income is less than or greater than absorption costing operating income and (b) the difference in variable costing and absorption costing operating income. (C) prepare an absorption costing income statement (d) prepare a variable costing income statement. (e) in your own words explain the difference in the absorption and variable costing income statements. With this assessment include why the operating income is different, what income statement managers use to make their decisions and what components do they use to make decisions. How would these decisions impact the company and how would they change the income statement required by GAAP? Fixed manufacturing costs are $10 per unit, and variable manufacturing costs are $25 per unit. Selling and administrative costs are $3 per unit variable and $2 per unit Fixed. Production was 13.000 units, while sales were 12,000 units at a selling price of $75 per unit. Determine (a) whether variable costing operating income is less than or greater than absorption costing operating income and (b) the difference in variable costing and absorption costing operating income. (C) prepare an absorption costing income statement (d) prepare a variable costing income statement. (e) in your own words explain the difference in the absorption and variable costing income statements. With this assessment include why the operating income is different, what income statement managers use to make their decisions and what components do they use to make decisions. How would these decisions impact the company and how would they change the income statement required by GAAP

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

Effective Writing A For Accountants

Authors: Claire B. May, Gordon S. May

9th Edition

0132567245, 9780132567244

More Books

Students also viewed these Accounting questions

Question

Explain why you agree or disagree with this statement.

Answered: 1 week ago