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Sesnie Company uses standard costing. Tim Berkner, the new president of Sesnie Company, is presented with the following data for Requirement 1. At what percentage

Sesnie Company uses standard costing. Tim Berkner, the new president of Sesnie Company, is presented with the following data for

Requirement 1. At what percentage of denominator level was the plant operating during

2020?

Determine the formula, then compute at what percentage of denominator level the plant was operating during

2020.

How much fixed manufacturing overhead was included in the 2019 and the 2020 ending inventory under absorption costing?

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1 Sesnie Company 2 Income Statements for the Year Ended December 31, 2020 Variable Absorption 3 Costing Costing 4 Revenues $ 9,150,000 $ 9,150,000 4,675,000 5,850,000 5 Cost of goods sold (at standard costs) 6 Fixed manufacturing overhead (budgeted) Fixed manufacturing overhead variances (all 7 unfavorable): 1,250,000 0 8 Spending 105,000 105,000 0 400,000 9 Production volume Total marketing and administrative costs (all 10 fixed) 1,545,000 1,545,000 11 Total costs 7,575,000 7,900,000 12 Operating income $ 1,575,000 $ 1,250,000 13 Inventories (at standard costs) 14 December 31, 2019 $ 1,260,000 $ 1,690,000 15 December 31, 2020 80,000 185,000

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