Johnson Stores produce and sell face powder called the 'Success' in cases. Each case is sold for $80. Thefollowing information relates to the product in the autumn and summer of 2020:SalesProductionDirect materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadFixed selling expensesVariable selling expensesVariable administrative expenses are 10% of sales valueFixed administrative expenses are 25% of sales valueAutumn23,400 units28,500 units$136,800$133,950$71,250$120,000$25,500$42,750Summer35,700 units30,600 units$146,880$143,820$76,500$122,000$25,500$45,900Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of$470,400. Assume that there will be no inventory held on January 1, 2020.Required:(1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques.(2) Compute and reconcile the differences in the operating incomes of both techniques.(3) Comment on the differences in the operating income between both techniques.

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Description: Johnson Stores produce and sell face powder called the 'Success' in cases. Each case is sold for $80. Thefollowing information relates to the product in the autumn and summer of 2020:SalesProductionDirect materialsDirect laborVariable manufacturing

Absorption Costing For the Absorption costing techniques while calculating the total cost of goods…

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Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of $470,400. Assume that there will be no inventory held on January 1, 2020. Required: (1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques. (2) Compute and reconcile the differences in the operating incomes of both techniques. (3) Comment on the differences in the operating income between both techniques.

Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of $470,400. Assume that there will be no inventory held on January 1, 2020. Required: (1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques. (2) Compute and reconcile the differences in the operating incomes of both techniques. (3) Comment on the differences in the operating income between both techniques.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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