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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Brief Exercise 3-32 Absorption-Costing Income Statement

Refer to the data for Beyta Company above.

Required:

  1. 1. Calculate the cost of goods sold under absorption costing.
  2. 2. Prepare an income statement using absorption costing.

Use the following information for Brief Exercises 3-32 and 3-33:

During the most recent year, Beyta Company had the following data:

Chapter 3, Problem 32BEB, Brief Exercise 3-32 Absorption-Costing Income Statement Refer to the data for Beyta Company above.

1.

To determine

Compute the value of cost of goods sold with the help of absorption costing.

Explanation

Cost of Goods Sold:

Cost of goods sold can be defined as the cost incurred in manufacturing the goods that are sold during a time period. It includes all direct costs such as direct material and labor cost and excludes all types of indirect expenses, such as selling and distribution expenses.

Use the following formula to calculate the value of costs of goods sold:

Cost Of Goods Sold=Cost Of PerUnit Produced1×Units Sold

Substitute $32 for cost of per unit produced and 8,800 units for units sold in the above formula

2.

To determine

Construct an income statement with the help of absorption costing.

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