Question
The following data were adapted from a recent income statement of Procter & Gamble Company: 1 (in millions) 2 Sales $84,167.00 3 Operating costs: 4
The following data were adapted from a recent income statement of Procter & Gamble Company:
1 (in millions)
2 Sales $84,167.00
3 Operating costs:
4 Cost of products sold $42,428.00
5 Marketing, administrative, and other expenses 30,337.00
6. Total operating costs $72,765.00
7. Income from operations $11,402.00
Assume that the variable amount of each category of operating costs is as follows:
1 (in millions)
2 Cost of products sold $23,760.00
3 Marketing, administrative, and other expenses 12,135.00
Required: A. Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period. If a net loss is incurred, enter that amount as a negative number using a minus sign.
B. If Procter & Gamble reduced its inventories during the period, what impact would that have on the income from operations determined under absorption costing? . Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period. If a net loss is incurred, enter that amount as a negative number using a minus sign. Procter & Gamble Company Variable Costing Income Statement (assumed) (in millions)
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