Brown Printing, a small family-owned business, began operations on March 1, manufacturing premium quality books. The owners have expertise in printing but no accounting knowledge or experience. The company’s independent accountant compiled the following data for the month of March. They have also requested an income statement.Sales price$90 per bookNumber of units produced15,000 booksNumber of units sold10,000 booksDirect materials cost$15 per bookDirect labor cost$6 per bookVariable manufacturing overhead$4 per bookFixed manufacturing overhead$240,000 per monthSelling cost$3 per bookAdministrative expenses$160,000 per month The owners want to understand these numbers and how they can use the information to run the business. Explain why there is a difference in net income between variable costing and absorption costing. Show your calculations. 2. Define and explain throughput costing.

Name: Brown Printing, a small family-owned business, began operations on Mar
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Description: Brown Printing, a small family-owned business, began operations on March 1, manufacturing premium quality books. The owners have expertise in printing but no accounting knowledge or experience. The company’s independent accountant compiled the follow

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

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Problem 3E: Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began...

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Brown Printing, a small family-owned business, began operations on March 1, manufacturing premium quality books. The owners have expertise in printing but no accounting knowledge or experience. The company’s independent accountant compiled the following data for the month of March. They have also requested an income statement.

Sales price	$90 per book
Number of units produced	15,000 books
Number of units sold	10,000 books
Direct materials cost	$15 per book
Direct labor cost	$6 per book
Variable manufacturing overhead	$4 per book
Fixed manufacturing overhead	$240,000 per month
Selling cost	$3 per book
Administrative expenses	$160,000 per month

The owners want to understand these numbers and how they can use the information to run the business.

Explain why there is a difference in net income between variable costing and absorption costing. Show your calculations.

2. Define and explain throughput costing.

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