Question: ABC Company uses variable costing for internal management reports, and absorption costing for external financial statements. Given the following data for the past two months:

  1. ABC Company uses variable costing for internal management reports, and absorption costing for external financial statements.

    Given the following data for the past two months:

    JULY

    AUGUST

    Beginning inventory

    2,000 units

    1,700 units

    Ending inventory

    1,700 units

    1,940 units

    Absorption costing income

    $880,400

    ???

    Variable Costing Income

    ???

    $924,000

    Variable Overhead Rate

    $35 per unit

    $35 per unit

    Fixed Overhead Rate

    $230 per unit

    		$230 per unit

    • What is the Variable Costing Income for July?
    • What is the Absorption Costing Income for August?
    • Using Absorption Costing was the amount of total overhead included in the Ending Inventory for August?

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