Dolphin Company manufactures two- person sailboats with a variable cost of $ 1,000. The sailboats sell for
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Required:
Under each of the following conditions, state
(a) Whether operating income is higher under variable or absorption costing
(b) The amount of the difference in reported operating income under the two methods. Treat each condition as an independent case.
1. Production........................................ 22,000 units
Sales ................................................. 25,000 units
2. Production......................................... 10,600 units
Sales ................................................. 10,600 units
3. Production......................................... 11,000 units
Sales ................................................. 9,800 units
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Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078025662
10th edition
Authors: Ronald Hilton, David Platt
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