Arizona Corp. has the following income statement under standard absorption costing AFTER disposing of variances: Sales $
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Question:
Arizona Corp. has the following income statement under standard absorption costing AFTER disposing of variances:
Sales $
Cost of Goods sold:
Standard cost of goods sold:
beg. inv. $
Production $
ending inv. $
Standard cost of goods sold: $
Adjust for variances
Adjusted Standard cost of goods sold: $
Gross Profit $
Selling and Admin. expenses
Variable selling and admin. $
Fixed selling and admin. $
Net income $
During the period Arizona produced units and sold units. Budgeted fixed factory overhead was $ Actual fixed factory overhead equaled budgeted fixed factory overhead, yet overhead was overapplied by $ There were no price, spending or efficiency variances, except for a direct labor price variance. Arizona corp. prorates variances based on ending account balances.
a Present a variable costing income statement.
b If Arizona Corp. does not prorate variances, what is net income under variable costing you do not need to calculate or present an income statement
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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