1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Assuming the manager's bonus is based on net income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is tied to minimizing ending inventory, which costing method would the manager prefer in the currew year? Variable Manufacturing Costs Fixed Manufacturing $10 per unit Overhead $9 $8 $7 $6 per unit $4 per unit $2 per unit $4 (00000) $100,000 per year Selling & Administrative Costs Per Year 45,000 Fixed per year $0 per unit Direct materials Direct labor Variable overhead 85,000 Variable per year Sales Price Callinn Drien Selling Price 100 Doris = $100 per unit Sales Price Selling Price $100 Per Unit Units Produced vs Units Sold Units Sold 1,500 units 10,000 units Units Produced 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Req 1 Req 2 Req 3 and 4 Prepare an income statement for the year using variable costing. WALTMAN CO. Income Statement (Variable Costing) For Year Ended December 31 Sales S 750,000 Less: Variable expenses Variable cost of goods sold $ 120,000 Variable selling and administrative expenses 85,000 Fixed selling and administrative costs 45,000 Gross profit 250,000 500,000 x Less: Cost of goods sold x Direct labor 900 Direct materials 700x Fixed selling and administrative costs 1,600 Income Req 1 Req 2 Req 3 and 4 < Req 1 Req 2 > Prepare an income statement for the year using absorption costing. WALTMAN CO. Income Statement (Absorption Costing) For Year Ended December 31 Sales Cost of goods sold Gross profit Net income Income $ 750,000 120,000 x 500,000 x < Req 1 Req 3 and 4 > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Answer the following questions. 3. Assuming the manager's bonus is based on income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is based on minimizing the cost of ending inventory, which costing method would the manager prefer in the current year? < Req 2 Req 3 and 4 > 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Assuming the manager's bonus is based on net income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is tied to minimizing ending inventory, which costing method would the manager prefer in the currew year? Variable Manufacturing Costs Fixed Manufacturing $10 per unit Overhead $9 $8 $7 $6 per unit $4 per unit $2 per unit $4 (00000) $100,000 per year Selling & Administrative Costs Per Year 45,000 Fixed per year $0 per unit Direct materials Direct labor Variable overhead 85,000 Variable per year Sales Price Callinn Drien Selling Price 100 Doris = $100 per unit Sales Price Selling Price $100 Per Unit Units Produced vs Units Sold Units Sold 1,500 units 10,000 units Units Produced 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Req 1 Req 2 Req 3 and 4 Prepare an income statement for the year using variable costing. WALTMAN CO. Income Statement (Variable Costing) For Year Ended December 31 Sales S 750,000 Less: Variable expenses Variable cost of goods sold $ 120,000 Variable selling and administrative expenses 85,000 Fixed selling and administrative costs 45,000 Gross profit 250,000 500,000 x Less: Cost of goods sold x Direct labor 900 Direct materials 700x Fixed selling and administrative costs 1,600 Income Req 1 Req 2 Req 3 and 4 < Req 1 Req 2 > Prepare an income statement for the year using absorption costing. WALTMAN CO. Income Statement (Absorption Costing) For Year Ended December 31 Sales Cost of goods sold Gross profit Net income Income $ 750,000 120,000 x 500,000 x < Req 1 Req 3 and 4 > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Answer the following questions. 3. Assuming the manager's bonus is based on income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is based on minimizing the cost of ending inventory, which costing method would the manager prefer in the current year? < Req 2 Req 3 and 4 >
Expert Answer:
Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
Posted Date:
Students also viewed these accounting questions
-
While the company's strategy sets forth an approach to offering superior value, a company's business model is management's blueprint for delivering a valuable product or service to customers in a...
-
1 TranscribedText: Trio Company reports the following information for its first year of operations. Direct materials $ 17 per unit Direct labor $ 18 per unit Variable overhead $ 6 per unit Fixed...
-
Analyze the leadership style(s) and/or approach(es) adopted by Bernard Arnault, CEO of LVMH. 1. Brief introduction of the leader's background with his name, company, and some background 2. One...
-
A 14-foot piece of string is cut into two pieces so that the longer piece is 2 feet longer than twice the shorter piece. Find the lengths of both pieces. What is the lenath of the shorter oiece?1...
-
In a clinical trial with two treatment groups, the probability of success in one treatment group is 0.5, and the probability of success in the other is 0.6. Suppose that there are five patients in...
-
How does the Six Sigma approach seem to differ from the TQM approach adopted by the company almost twenty years ago?
-
The bond market yield is 7%. A company issues a bond with equity warrants at a gross yield to maturity of 3% assuming the warrants are not exercised. What is the cost of this product? What is the...
-
Can a creditor of both the husband and wife under the same obligation obtain an execution against a Winnebago mobile home owned by the husband and wife in tenancy by entirety?
-
32.A point of symmetry of the function f where f(x) = x 13+ 4 is x-3 a) (3,-4) b) (3,5) c) (-3,-4) d) (-3,4)
-
The demand for a special small engine over the next five quarters is 200, 150, 300, 250, and 400 units, respectively. The manufacturer supplying the engine has different production capacities...
-
You have to remit CAD 20,000 towards the University fees for the admission in the Montreal University. The spot rate of exchange in India is 1USD= Rs. 82/83. The exchange margin is 1%. In Singapore1...
-
For this section; your Managing Financial Counselor has asked you to write a minimum one page summary on how you are going to use the above information to get ready for the next client meeting. This...
-
What is your initial replicating portfolio if you are replicating a put on a stock while the put's price is $8, its delta is -0.7, the stock price is $50, and the annual (continuously compounded)...
-
16.Fifteen people work in an office. 9 are women and 6 are men.The flu virus is coming. (a)In how many ways can the flu virus randomly select 7 workers out of the 15 to get sick?Show work. (b)In how...
-
What could be an excellent Budget Narrative / Budget Justification for the following project? Please, use the attached template to itemize the project expenses and miscellaneous. Project title:...
-
Suppose Karl has $9197 and want to invest these funds to make a portfolio with a beta of 0.42 by investing in the market portfolio and by borrowing/lending at the risk-free rate. What would his...
-
Question 2 a) Name the two major structural topology optimisation techniques and describe the major differ- ences between them. Propose a topology optimisation problem relevant to your programme of...
-
A bar of a steel alloy that exhibits the stress-strain behavior shown in Figure 6.22 is subjected to a tensile load; the specimen is 375 mm (14.8 in.) long and has a square cross section 5.5 mm (0.22...
-
The statements of financial position for Maxi Ltd and Mini Ltd are set out below. On 1 April last year, Maxi Ltd bought 1,500,000 shares of Mini Ltd for a total consideration of 5 million. At that...
-
A year ago Pod Ltd bought 225,000 1 fully paid ordinary shares of Pea Ltd for a consideration of 500,000. Pea Ltds share capital and share premium were each the same as at todays date. Simplified...
-
It has been suggested that too much information might be as bad as too little information for users of annual reports. Explain.
Study smarter with the SolutionInn App