0625 1200 14 12009600 0125 9 330 10 17 1 company

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Unformatted text preview: ,200/$9,600 = 0.125 9 330 10-17 1. Company A residual income = $2,200 − (0.12)($20,000) = −$200 Company B residual income = $18,000 − (0.12)($144,000) = $720 Company C residual income = $12,000 − (0.12)($100,000) = 0 Company D residual income = $1,200 − (0.12)($9,600) = $48 331 PROBLEMS 10–18 1. Diaz Company Absorption-Costing Income Statements Sales ........................................................................... Less: Cost of goods sold* ........................................ Gross margin ............................................................. Less: Selling and administrative expenses ............ Net income ........................................................... *Beginning inventory ................................................ Cost of goods manufactured .................................. Goods available for sale ......................................... Less: Ending inventory ........................................... Cost of goods sold ............................................. Year 1 $ 572,000 299,000 $ 273,000 163,800 $ 109,200 Year 2 $ 660,000 361,000 $ 299,000 163,800 $ 135,200 $ $ 46,000 315,000 $ 361,000 0 $ 361,000 0 345,000 $ 345,000 46,000 $ 299,000 Firm performance has improved from Year 1 to Year 2. 2. Diaz Company Variable-Costing Income Statements Sales ........................................................................... Less: Variable cost of goods sold* ......................... Contribution margin ................................................. Less fixed expenses: Overhead .............................................................. Selling and administrative .................................. Net income ................................................................. *Beginning inventory ................................................ Variable cost of goods manufactured ................... Goods available for sale ......................................... Less: Ending inventory ................
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This document was uploaded on 11/26/2013.

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