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Sales price Variable manufacturing expense per unit .... $ Sales commission expense per unit......... $ Fixed manufacturing overhead .............$ Fixed operating expenses Number of goggles
Sales price Variable manufacturing expense per unit .... $ Sales commission expense per unit......... $ Fixed manufacturing overhead .............$ Fixed operating expenses Number of goggles produced Number of goggles sold 2,310,000 260,000 210,000 200,000 The annual data that follows pertain to Sea Down There, a manufacturer of swimming goggles (the company had no beginning inventory) (Click the icon to view the data.) Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Sea Down There for the year. 2. Which statement shows the higher operating income? Why? 3. The company marketing vice president believes a new sales promotion that costs $140,000 would increase sales to 210,000 goggles. Should the company go ahead with the promotion? Give your reason. Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Sea Down There for the yoar. Bogin with the conventional (absorption costing) income statement Sea Down There Income Statement (Absorption Costing) For the Year Ended December 31 Less: Less: Operating expenses
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