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  • 9-34,37,48 Horngren

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    yolandafitrionita
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    The document shows variable and absorption costing income statements for years 2016 and 2017. The variable costing statement shows revenues of $2.7 million each year and total fixed costs of $5.36 million, resulting in operating income of $36,000. The absorption costing statement is incomplete, as it does not show the calculations to allocate fixed manufacturing costs to inventory and cost of goods sold.

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    9-34,37,48 horngren

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    9-34,37,48 horngren

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    The document shows variable and absorption costing income statements for years 2016 and 2017. The variable costing statement shows revenues of $2.7 million each year and total fixed costs of $5.36 million, resulting in operating income of $36,000. The absorption costing statement is incomplete, as it does not show the calculations to allocate fixed manufacturing costs to inventory and cost of goods sold.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    19 views1 page

    9-34,37,48 Horngren

    Uploaded by

    yolandafitrionita
    The document shows variable and absorption costing income statements for years 2016 and 2017. The variable costing statement shows revenues of $2.7 million each year and total fixed costs of $5.36 million, resulting in operating income of $36,000. The absorption costing statement is incomplete, as it does not show the calculations to allocate fixed manufacturing costs to inventory and cost of goods sold.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    P 9-34

    1. A. Variable-Costing Income Statement:


    2016 2017 Together
    Revenues (and $2,700,000 $ 2,700,000 $ 5,400,000
    contribution margin)
    Fixed costs:
    Manufacturing costs $ 2,580,000 $ 2,580,000 $ 5,160,000
    Operating costs 102,000 102,000 $ 204,000
    Total fixed cost $2,682,000 $2,682,000 $ 5,364,000
    Operating income $ 18,000 $ 18,000 $ 36,000

    B. Absorption-Costing Income Statement


    2016 2017 Together
    Revenues $2,700,000 $2,700,000 $ 5,400,000
    Cost of goods sold
    Beginning inventory $0 $2,700,000
    Allocated fixed manufacturing
    costs at $8
    Deduct ending inventory
    Adjustment for production-
    volume variance
    Cost of goods sold
    Gross margin
    Operating costs
    Operating income

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