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Rooney Company incurred manufacturing overhead cost for the year as follows: Direct materials Direct labor Manufacturing overhead s 39.50/unit $ 27.80/unit s 11.90/unit $22,200 Variable
Rooney Company incurred manufacturing overhead cost for the year as follows: Direct materials Direct labor Manufacturing overhead s 39.50/unit $ 27.80/unit s 11.90/unit $22,200 Variable Fixed ($18.50/unit for 1,200 units) 4,410 $15,500 Variable selling and administrative expenses Fixed selling and administrative expenses The company produced 1,200 units and sold 700 of them at $181.70 per unit. Assume that the production manager is paid a 1 percent bonus based on the company's net income. Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? Complete this question by entering your answers in the tabs b
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