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  • Soal Lab 8-24

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    Bianca Bicycle Company manufactures mountain bikes with a variable cost of $200 each that sell for $350 each. The company's budgeted fixed manufacturing overhead for the year was $2,200,000, and planned and actual production for the year were the same. Under three different production and sales conditions, state whether operating income is higher under variable or absorption costing and the amount of difference in reported operating income under the two methods.

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    soal lab 8-24

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    Bianca Bicycle Company manufactures mountain bikes with a variable cost of $200 each that sell for $350 each. The company's budgeted fixed manufacturing overhead for the year was $2,200,000, and planned and actual production for the year were the same. Under three different production and sales conditions, state whether operating income is higher under variable or absorption costing and the amount of difference in reported operating income under the two methods.

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

    Soal Lab 8-24

    Uploaded by

    bella
    Bianca Bicycle Company manufactures mountain bikes with a variable cost of $200 each that sell for $350 each. The company's budgeted fixed manufacturing overhead for the year was $2,200,000, and planned and actual production for the year were the same. Under three different production and sales conditions, state whether operating income is higher under variable or absorption costing and the amount of difference in reported operating income under the two methods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Problem 8-24

    Bianca Bicycle Company manufactures mountain bikes with a variable cost of $200. The
    bicycles sell for $350 each. Budgeted fixed manufacturing overhead for the most recent year
    was $2,200,000. Planned and actual production for the year were the same.

    Required: Under each of the following conditions, state (a) wheter operating income is higher
    under variable or absorption costing and (b) the amount of the difference in reported operating
    income under the two methods. Treat each condition as an independent case.

    1. Production ........................................... 20,000 units


    Sales .................................................... 23,000 units
    2. Production ........................................... 10,000 units
    Sales .................................................... 10,000 units
    3. Production ........................................... 11,000 units
    Sales .................................................... 9,000 units

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