SI absorption- variable and reviewing

SI absorption- variable and reviewing - SI cfw...

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This material is produced by the SI Program at Arizona State University student success .asu.edu { collaborative peer-led structured group study SI e6-37a The annual data that follows pertains to Rays, a manufacturer of swimming goggles (Ray’s has no beginning inventories): Sales Price $35 Variable manufacturing expense per unit $15 Sales commission expense per unit $5 Fixed Manufacturing Overhead $2,000,000 Fixed Operating Expenses $250,000 Number of goggles produced 200,000 Number of goggles sold 185,000 Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Rays for the year. Which statement shows the higher operating income? Why? Rays’ marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 200,000 goggles. Should the company go ahead with the promotion? e7-53b) Peter’s Sporting Goods is a retailer of sporting equipment. Last year, Peter’s Sporting Goods sales revenues totaled $6,400,000. Total expenses were $2,800,000. Of this amount, approximately $1,792,000 were variable, while the remainder were
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SI absorption- variable and reviewing - SI cfw...

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