For Chamiching, which of the following is true? Variable costing income (VCI) exceeds full costing income (FCI) every year VCI exceeds FCI in Yrs 1 and 2 only VCI exceeds FCI in Yrs 2 and 3 only VCI never exceeds FCI
For Chamiching, which of the following is true? Variable costing income (VCI) exceeds full costing income (FCI) every year VCI exceeds FCI in Yrs 1 and 2 only VCI exceeds FCI in Yrs 2 and 3 only VCI never exceeds FCI
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter7: Inventory Cost Flow Assumptions (fifolifo)
Section: Chapter Questions
Problem 9R: Click the Chart sheet tab. On the screen is a column chart showing ending inventory costs. During a...
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Chamiching makes hacksaw blades. Inventory values are determined using the first in, first out (FIFO) method. Production and sales data for the first three years appear below.
Hacksaw blades |
Sold |
Produced |
Yr 1 |
18,000 |
22,000 |
Yr 2 |
25,000 |
23,000 |
Yr 3 |
37,000 |
35,000 |
|
Sales price |
Full cost |
Yr 1 |
$10.00 |
$6.00 |
Yr 2 |
$11.00 |
$6.60 |
Yr 3 |
$12.00 |
$7.60 |
In the first year, variable costs accounted for half of the full costs. Total fixed production costs increased each subsequent year by 20%, as a result of step-fixed costs and a general inflationary price increase.
For Chamiching, which of the following is true?
Variable costing income (VCI) exceeds full costing income (FCI) every year
VCI exceeds FCI in Yrs 1 and 2 only
VCI exceeds FCI in Yrs 2 and 3 only
VCI never exceeds FCI
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