Accounting Addidas sells shoes at $55 per pair. The following data are related to its 2022 operation: Items Year 2022 Sales 95,000 unit Beginning inventory 20,000 unit Production 85,500 unit Ending inventory 10,500 unit Variable manufacturing cost per unit $20 Fixed manufacturing overhead costs $2,000,000 per year Denominator machine hours 1800 Standard production rate 50 units per machine hour Variable operating expenses $5 per unit Fixed selling and administration expenses $100,000 per year Assumption: The standard cost per unit is same for units in beginning and unit produced during the year and no price, spending or efficiency variance. Required: a. Prepare income statements for year 2022 using absorption costing. b. Prepare income statements for year 2022 using variable costing. c. Explain why the income was different each year using the two methods. d. Explain why absorption costing has potential for leading to undesirable incentives for managers. Please answer all parts i cant post 4th part separately beacuse it is interlinked to other three parts please answer if possible thanku in advance
Accounting
Addidas sells shoes at $55 per pair. The following data are related to its 2022 operation: Items Year 2022 Sales 95,000 unit Beginning inventory 20,000 unit Production 85,500 unit Ending inventory 10,500 unit Variable
a. Prepare income statements for year 2022 using absorption costing.
b. Prepare income statements for year 2022 using variable costing.
c. Explain why the income was different each year using the two methods.
d. Explain why absorption costing has potential for leading to undesirable incentives for managers.
Please answer all parts i cant post 4th part separately beacuse it is interlinked to other three parts please answer if possible thanku in advance
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