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DC-Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the company produces an identical number of units, although the sales in units differ from month to month. Product B Selling price $109 Units in beginning inventory Units produced 360 6,900 7,200 Units sold Variable costs per unit: Direct materials $29 S31 $2 Direct labour Variable manufacturing overhead Variable selling and administrative $7 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $53,500 $145,000 Submission Instructions: 1. Compute the Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare a reconciliation from your Operating Income under Variable Costing to Operating Income under Absorption Costing. Show the differences between each method.

DC-Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the company produces an identical number of units, although the sales in units differ from month to month. Product B Selling price $109 Units in beginning inventory Units produced 360 6,900 7,200 Units sold Variable costs per unit: Direct materials $29 S31 $2 Direct labour Variable manufacturing overhead Variable selling and administrative $7 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $53,500 $145,000 Submission Instructions: 1. Compute the Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare a reconciliation from your Operating Income under Variable Costing to Operating Income under Absorption Costing. Show the differences between each method.

Accounting
Accounting
27th Edition
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Chapter21: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 21.28EX: Appendix Absorption costing income statement On June 30, the end of the first month of operations,...
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puestion 5.3 DC-Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the company produces an identical number of units, although the sales in units differ from month to month. Product B Selling price $109 Units in beginning inventory Units produced Units sold 360 6,900 7,200 Variable costs per unit: $29 $31 Direct materials Direct labour Variable manufacturing overhead $2 Variable selling and administrative $7 Fixed costs: $53,500 $145,000 Fixed manufacturing overhead Fixed selling and administrative Submission Instructions: 1. Compute the Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare a reconciliation from your Operating Income under Variable Costing to Operating Income under Absorption Costing. Show the differences between each method.
Transcribed Image Text:puestion 5.3 DC-Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the company produces an identical number of units, although the sales in units differ from month to month. Product B Selling price $109 Units in beginning inventory Units produced Units sold 360 6,900 7,200 Variable costs per unit: $29 $31 Direct materials Direct labour Variable manufacturing overhead $2 Variable selling and administrative $7 Fixed costs: $53,500 $145,000 Fixed manufacturing overhead Fixed selling and administrative Submission Instructions: 1. Compute the Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare a reconciliation from your Operating Income under Variable Costing to Operating Income under Absorption Costing. Show the differences between each method.
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