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Q1. Newcastle United Inc., is a small manufacturing company. The following income statement for the first year was prepared by manager, Yunji. CEO, Mr. Baker
Q1. Newcastle United Inc., is a small manufacturing company. The following income statement for the first year was prepared by manager, Yunji. CEO, Mr. Baker of Newcastle United is happy over the profit shown for the year, particularly because he has been planning to expand facility. Hurley, manager of Newcastle United insists that the company would have increased net income for the year, if absorption costing had been used. Data of accounting department of Newcastle United for producing the product, tablet for the first year follow: 1. Was Hurley manager of Newcastle United, correct in suggesting that the company really increase net income for the year? 2. Give your answers on the following questions. a. Compute the unit product cost under absorption costing. b. Make Newcastle United's income statement for the year using absorption costing. c. Reconcile the absorption costing and variable costing net incomes. Q1. Newcastle United Inc., is a small manufacturing company. The following income statement for the first year was prepared by manager, Yunji. CEO, Mr. Baker of Newcastle United is happy over the profit shown for the year, particularly because he has been planning to expand facility. Hurley, manager of Newcastle United insists that the company would have increased net income for the year, if absorption costing had been used. Data of accounting department of Newcastle United for producing the product, tablet for the first year follow: 1. Was Hurley manager of Newcastle United, correct in suggesting that the company really increase net income for the year? 2. Give your answers on the following questions. a. Compute the unit product cost under absorption costing. b. Make Newcastle United's income statement for the year using absorption costing. c. Reconcile the absorption costing and variable costing net incomes
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