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= Homework: Homework... Question 2, E9-27 (simila... Part 1 of 6 HW Score: 9.29%, 0.93 of 10 points O Points: 0 of 5 Save Next
= Homework: Homework... Question 2, E9-27 (simila... Part 1 of 6 HW Score: 9.29%, 0.93 of 10 points O Points: 0 of 5 Save Next Question Carpet Authority Company manufacturers a professional grade vacuum cleaner and began op or 2020, Carpet Authority budgeted to produce and sell 28,000 units. The company had no price, spending, or efficiency variances and writes off production-volume variance to cost of goods sold. Actual data for 2020 are given as follows: (Click the icon to view the actual data for 2020.) Read the requirements. Requirement 1. Prepare a 2020 income statement for Carpet Authority Company using variable costing. Complete the top half of the income statement first, then complete the bottom portion. (For amounts with a $0 balance, make sure to enter "0" in the appropriate input field.) Variable Costing Revenues Variable cost of goods sold: Beginning inventory Variable manufacturing costs Cost of goods available for sale Deduct ending inventory Variable cost of goods sold Variable marketing costs Contribution margin MI Next Question Data Table A B 1 Units produced 24,000 2 Units sold 19,500 3 Selling price $ 438 4 Variable costs: 5 Manufacturing cost per unit produced: 6 Direct materials $ 28 7 26 8 Direct manufacturing labor Manufacturing overhead Marketing cost per unit sold 64 9 48 10 Fixed costs: 11 Manufacturing costs $ 1,792,000 12 Administrative costs 910,500 13 Marketing costs 1,538,800 Print Done Requirements 1. Prepare a 2020 income statement for Carpet Authority Company using variable costing. 2. Prepare a 2020 income statement for Carpet Authority Company using absorption costing. 3. Explain the differences in operating incomes obtained in requirements 1 and 2. 4. Carpet Authority's management is considering implementing a bonus for the supervisors based on gross margin under absorption costing. What incentives will this bonus plan create for the supervisors? What modifications could Carpet Authority management make to improve such a plan? Explain briefly. Print Done
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