The following data are available for Ruggles Company for the year ended September 30, 2012.
Sales:
Manufacturing costs incurred:
Nonmanufacturing costs incurred:
Required:
a. Determine operating income using the variable costing approach.
b. Determine operating income using the absorption costing approach.
c. Explain why the income was different each year using the two methods. Show computations.

Question

The following data are available for Ruggles Company for the year ended September 30, 2012.
Sales:
  Manufacturing costs incurred:
  Nonmanufacturing costs incurred:
  Required:
a. Determine operating income using the variable costing approach.
b. Determine operating income using the absorption costing approach.
c. Explain why the income was different each year using the two methods. Show computations.

Quizplus · Accepted Answer

The Answer of The following data are available for Ruggles Company for the year ended September 30, 2012.
Sales:
  Manufacturing costs incurred:
  Nonmanufacturing costs incurred:
  Required:
a. Determine operating income using the variable costing approach.
b. Determine operating income using the absorption costing approach.
c. Explain why the income was different each year using the two methods. Show computations.

The Following Data Are Available for Ruggles Company for the Year