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The Following Data Are Available for Brennan Soft Toys Company

Question 87

Essay
The following data are available for Brennan Soft Toys Company for the year ended September 30, 2017.
  
Required:
a.Determine operating income using the variable-costing approach.
b.Determine operating income using the absorption-costing approach.
c.Explain why operating income is not the same under the two approaches.

The following data are available for Brennan Soft Toys Company for the year ended September 30, 2017.
The following data are available for Brennan Soft Toys Company for the year ended September 30, 2017.     Required: a.Determine operating income using the variable-costing approach. b.Determine operating income using the absorption-costing approach. c.Explain why operating income is not the same under the two approaches.
Required:
a.Determine operating income using the variable-costing approach.
b.Determine operating income using the absorption-costing approach.
c.Explain why operating income is not the same under the two approaches.

Correct Answer:

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a. Sales = 24,000 × $50 = $1,200,000
Var...

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