The following data relates to the operations of KDA Company April 2006 Beginning Stock - 0...

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The following data relates to the operations of KDA Company April 2006 Beginning Stock - 0 - 5,000 units sold 8,000 units produced Selling price per unit $2,400 Direct Manufacturing Cost per unit $1,000 Fixed factory overhead $2,800,000 Fixed factory overhead per unit $3,500 Fixed Commercial Expenses $1,000,000 Requested: 1. Prepare profit and loss calculations using absorption costing calculations. 2. Present calculations that explain why there is a difference in operating income between the variable costing method and the absorption costing method. The following data relates to the operations of KDA Company April 2006 Beginning Stock - 0 - 5,000 units sold 8,000 units produced Selling price per unit $2,400 Direct Manufacturing Cost per unit $1,000 Fixed factory overhead $2,800,000 Fixed factory overhead per unit $3,500 Fixed Commercial Expenses $1,000,000 Requested: 1. Prepare profit and loss calculations using absorption costing calculations. 2. Present calculations that explain why there is a difference in operating income between the variable costing method and the absorption costing method.

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To prepare profit and loss calculations using absorption costing we need to consider both variable costs and fixed costs that are related to the produ... View the full answer