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Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. ( CAT ) for the year ended December
Variable and Absorption Costing
The following data were adapted from a recent income statement of Caterpillar Inc. CAT for the year ended December :
Line Item Description in millions
Sales $
Cost of goods sold $
Selling, administrative, and other expenses
Total expenses $
Operating income $
Assume that $ million of cost of goods sold and $ million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows:
Line Item Description Amount
Beginning inventory $
Ending inventory
Also, assume that of the beginning and ending inventories were fixed costs.
Question Content Area
a Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million.
Caterpillar Inc.
Variable Costing Income Statement assumed
For the Year Ended December
Line Item Description Amount Amount
$ Select
Variable cost of goods sold:
Beginning inventory $Beginning inventory
Select
Select
Select
$ Select
Select
$ Select
Fixed costs:
$ Select
Select
Select
$ Select
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