Whirlpool Corporation had the following abbreviated income statement for a recent year: Assume that there were $3,680
Question:
Assume that there were $3,680 million fixed manufacturing costs and $890 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows:
January 1..................................$2,591 million
December 31...........................$2,197 million
Assume that 30% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period.
a. Prepare an income statement according to the variable costing concept for Whirlpool Corporation for the recent year.
b. Explain the difference between the amount of income from operations reported under the absorption costing and variable costing concepts.
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Step by Step Answer:
a b The income from operations under the variable costing concept will not be the same as the income from operations under the absorption costing conc...View the full answer
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
