Question

Reconsider Exhibits 13-3 and 13-4, pages 542 and 543 . Suppose that in 20X1 production was 15,500 computers instead of 14,000 computers, and sales were 15,000 computers. Also assume that the net variances for all variable manufacturing costs were $18,000, unfavorable. Also assume that actual fixed manufacturing costs were $1,560,000.
1. Prepare income statements for 20X1 under variable costing and under absorption costing. Use a format similar to Exhibits 13-8 and 13-9 , on page 551 .
2. Explain why operating income was different under variable costing and absorption costing. Show your calculations.



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  • CreatedNovember 19, 2014
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