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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 15
INCOME STATEMENTS, VARIABLE AND ABSORPTION COSTING
The following information pertains to Petruchio, Inc., for last year:
There are no work-in-process inventories. Normal activity is 120,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.
Required:
1. How many units are in ending inventory?
2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income.
3. Assume the selling price per unit is $29. Prepare an income statement using (a) variable costing and (b) absorption costing.
The following information pertains to Petruchio, Inc., for last year:
There are no work-in-process inventories. Normal activity is 120,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.
Required:
1. How many units are in ending inventory?
2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income.
3. Assume the selling price per unit is $29. Prepare an income statement using (a) variable costing and (b) absorption costing.
Explanation
Verified
Verified
1)
Identify the ending inventory in uni...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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