Absorption & Variable Costing Problem

Absorption & Variable Costing Problem - John Anthony...

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John Anthony Ray MANACC Assignment Problem on Absorption and Variable Costings PREPARE INCOME STATEMENT UNDER ABSORPTION AND VARIABLE COSTING FOR 3 YEARS Year 1 Absorption Variable $ 1,000,000 Sales ($25 x 40,000) $ 1,000,000 Case 1 Less: Variable Costs Beg. Inv - MOH ($10 x 40,000) $400,000 Sales ($25 x 40,000) Variable MOH Less : cost of Goods Sold ($10 x 40,000) $400,000 ($1 x 40,000 $40000 $440,000 Fixed MOH $300,000 Contribution Margin $560,000 Less:: End Inv 700,000 Less: Fixed Costs Gross Profit $300,000 Manufacturing OH $300,000 $200,000 $500,000 Variable ( 1 x 40,000)$40,000 Net Income $60,000 Fixed $200,000 $240,000 Net Income $60,000 Year 2 Absorption Variable $750,000 Sales ($25 x 30,000) $750,000 Less: Variable Cost Beg. Inv $ - Beg. Inv Sales ($25 x 30,000) Variable MOH MOH ($10 x 40,000) $400,000 Less: Costs of Goods Sold ($10 x 40,000 $400,000 Less: End Inv $100,000 Fixed MOH $300,000 $30,000 $330,000 Less: End Inv $ 175,000 $525,000 Contribution Margin $420,000
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This note was uploaded on 05/13/2010 for the course ACCOUNTING A11 taught by Professor Solmon during the Winter '08 term at Usman Institute of Technology.

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Absorption & Variable Costing Problem - John Anthony...

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