Question: 9 - 2 7 . ABSORPTION VERSUS VARIABLE COSTING. Horace Company manufactures a professional - grade vacuum cleaner and began operations in 2 0 2

9-27. ABSORPTION VERSUS VARIABLE COSTING. Horace Company manufactures a professional-grade vacuum
9-27. ABSORPTION VERSUS VARIABLE COSTING. Horace Company manufactures a professional-grade vacuum cleaner and began operations in 2020. For 2020. Horace budgeted to produce and sell 25,000 units. The company had no price, spending, or efficiency variances and writes off production-volume variance to cost of goods sold. Actual data for 2020 are as follows:
Required
Prepare a 2020 income statement for Horace Company using variable costing.
Prepare a 2020 income statement for Horace Company using absorption costing.
Explain the differences in operating incomes obtained in requirements 1 and 2.
Horace's management is considering implementing a bonus for its
cleaner and began operations in 2020. For 2020. Horace budgeted to produce

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