Donovan Inc. calculates income under absorption costing. The company provides bonuses to managers based on the...
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Donovan Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021, the Deck division has the following financial results: Sales (100,000 units) Cost of Goods Sold Opening Inventory Cost of Goods Manufactured (125,000 units) Variable Costs Fixed Costs Ending Inventory COGS Gross Margin Selling and Admin Expenses Variable Fixed Operating Income $ $ $ $ $ -$ $ $ $ $ $ $ 8,000,000 4,500,000 3,000,000 7,500,000 1,500,000 6,000,000 2,000,000 650,000 1,000,000 1,650,000 350,000 The old manager for the Deck division left in early 2021. A new manager was hired in 2022. The new manager produced 90,000 units and sold 98,000 units in 2022. REQUIRED A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation. Donovan Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021, the Deck division has the following financial results: Sales (100,000 units) Cost of Goods Sold Opening Inventory Cost of Goods Manufactured (125,000 units) Variable Costs Fixed Costs Ending Inventory COGS Gross Margin Selling and Admin Expenses Variable Fixed Operating Income $ $ $ $ $ -$ $ $ $ $ $ $ 8,000,000 4,500,000 3,000,000 7,500,000 1,500,000 6,000,000 2,000,000 650,000 1,000,000 1,650,000 350,000 The old manager for the Deck division left in early 2021. A new manager was hired in 2022. The new manager produced 90,000 units and sold 98,000 units in 2022. REQUIRED A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.
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Lets calculate the operating income for the Deck division in 2022 using absorption costing and variable costing A Operating Income for 2022 using Abso... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
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