Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON

#### Videos

Textbook Question
Chapter 9, Problem 9.33E

Throughput Costing (continuation of 9-32)

1. 1. Prepare an income statement under throughput costing for the year ended December 31, 2017 for Garvis Company

Required

1. 2. Reconcile the different between the contribution margin and throughput margin for Garvis in 2017. Then reconcile the operating income between variable costing and throughput costing for Garvis in 2017.
2. 3. Advocates of throughput costing say it provides managers less incentive to produce for inventory than either variable costing or, especially, absorption costing. Do you agree? Why or why not? Under what circumstances might you recommend that Garvis use throughput costing?
11:21
Students have asked these similar questions
Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?
Which of the following is NOT true regarding an income statement organized according to thecontribution margin approach?   Question 6 options:   The contribution margin income statement is organized by cost behavior.   Operating income will always be the same as operating income in a traditional income statement regardless of changes in inventory levels.   All fixed costs, including fixed MOH, are expensed below the contribution margin line.   The contribution margin is equal to sales revenue minus variable expenses.
The contribution margin income statementa. reports expenses based on cost behavior pattern rather than cost function.b. unitizes fixed costs.c. shows contribution margin rather than operating income as the bottom line.d. is sometimes used for financial reporting purposes.e. none of the above.Use the following information for Questions 9 and 10.O’Brien, Inc.’s, 2013 contribution margin income statement shows thefollowing:Sales @ \$10 per unit . . . . . . . . . . . . . \$ 160,000Less: Variable expense . . . . . . . . . . . (128,000)Contribution margin. . . . . . . . . . . . . . \$ 32,000Less: Fixed expenses . . . . . . . . . . . . (44,000)Operating income (loss) . . . . . . . . . . . \$ (12,000)
• Copyright, Community Guidelines, DSA & other Legal Resources: Learneo Legal Center
• bartleby, a Learneo, Inc. business