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chapter19probsetc - PROBLEM 19-1C Rosotti Corporation began...

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PROBLEM 19-1C Rosotti Corporation began operations on January 1, 2005. Cost and sales information for 2005 is summarized below. Total costs of operations: Direct materials $60 per unit Direct labor $90 per unit Variable factory overhead $40 per unit Variable selling expenses $11 per unit Variable administrative expenses $10 per unit Sales price $400 per unit Fixed factory overhead costs $1,200,000 Fixed selling expenses $11,900,000 Fixed administrative expenses $12,100,000 Units produced 300,000 Units sold 250,000 Units in ending inventory 50,000 Tax rate 40% Required: 1. Prepare an income statement for 2005 for the company under absorption costing. 2. Prepare an income statement for 2005 for the company under variable costing. Hint: The income tax expense can only be calculated correctly under the full-absorption method. Use the same amount of income tax expense on both income statements. 1
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PROBLEM 19-2C The Genoa Corporation has incurred the following costs of operations for all of 2005. It produces only
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