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# 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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