Problem 3 (Variable Costing Income Statement; Reconciliation) During Floppy'Company's first two years of operations, the company reported net operating income as follows (absorption costing basis): Year 1 Year 2 Sales (at P50 per unit) Less cost of goods sold: Beginning inventory Add cost of goods manufactured (at P34 per unit) Goods available for sale P1,000,000 P1,500,000 170,000 850,000 850,000 170,000 680,000 320,000 310,000 P 10,000 850,000 1,020,000 Less ending inventory (at P34 per unit) Cost of goods sold Gross margin Less selling and administrative expenses* Net operating income 1,020,000 480,000 340,000 P 140,000 * P3 per unit variable; P250,000 fixed each year.
Problem 3 (Variable Costing Income Statement; Reconciliation) During Floppy'Company's first two years of operations, the company reported net operating income as follows (absorption costing basis): Year 1 Year 2 Sales (at P50 per unit) Less cost of goods sold: Beginning inventory Add cost of goods manufactured (at P34 per unit) Goods available for sale P1,000,000 P1,500,000 170,000 850,000 850,000 170,000 680,000 320,000 310,000 P 10,000 850,000 1,020,000 Less ending inventory (at P34 per unit) Cost of goods sold Gross margin Less selling and administrative expenses* Net operating income 1,020,000 480,000 340,000 P 140,000 * P3 per unit variable; P250,000 fixed each year.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 21BEA: Inventory Valuation under Absorption Costing Refer to the data for Judson Company above. Required:...
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