Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
15th Edition
ISBN: 9780133781106
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
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Chapter 9, Problem 9.22E

1.

To determine

Variable Costing:

The variable costing is a method used to allocate the fixed manufacturing overhead by a company. It allocates these overheads to the period of production and not to the inventory left unsold or ending inventory.

Income Statement:

A part of periodical financial statements that reports the total earnings and expenses for a company or a unit of production is called income statement.

To prepare: The income statements for Company R under variable costing.

2.

To determine

Absorption Costing:

The absorption costing is a method used to allocate the fixed manufacturing overhead by a company. It allocates these overheads based on the inventory produced and inventory sold. It is based on the approach that the unsold inventory also consist some fixed manufacturing overhead incurred during a period.

To prepare: The income statements for company H under absorption costing.

3.

To determine

To explain: The difference in operating income under both the costing methods.

4.

To determine

To explain: The incentives of bonus plan based on absorption costing and the required improvement of it.

Blurred answer

Chapter 9 Solutions

Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)

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