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Campbell Company Incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead Variable Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 38.30/unit $ 26.60/unit $ 11.80/unit $22,800 $ 4,760 $14,700 The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?

Campbell Company Incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead Variable Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 38.30/unit $ 26.60/unit $ 11.80/unit $22,800 $ 4,760 $14,700 The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4 Campbell Company Incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead Variable Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an Income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Required A Required B Required C Prepare an income statement using absorption costing. $ 38.30/unit $ 26.60/unit Complete this question by entering your answers in the tabs below. Cost of goods Sold $ 11.80/unit $22,800 $ 4,760 $14,700 CAMPBELL COMPANY Income Statement (Absorption Costing) < Required A $ $ 0 0 Required B >
Transcribed Image Text:Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4 Campbell Company Incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead Variable Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an Income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Required A Required B Required C Prepare an income statement using absorption costing. $ 38.30/unit $ 26.60/unit Complete this question by entering your answers in the tabs below. Cost of goods Sold $ 11.80/unit $22,800 $ 4,760 $14,700 CAMPBELL COMPANY Income Statement (Absorption Costing) < Required A $ $ 0 0 Required B >
Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an income statement using variable costing. Variable costs Direct materials Direct labor CAMPBELL COMPANY Income Statement (Variable Costing) Manufacturing overhead Variable < Required A Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4 Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses Campbell Company Incurred manufacturing overhead cost for the year as follows. S S Required A Required B Required C Absorption costing Variable costing Which approach is recommended? Required C > < Required B 0 0 $ 38.30/unit $ 26.60/unit The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an Income statement using absorption costing. b. Prepare an Income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Complete this question by entering your answers in the tabs below. $ 11.80/unit $22,800 $ 4,760 $14,700 Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required C >
Transcribed Image Text:Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an income statement using variable costing. Variable costs Direct materials Direct labor CAMPBELL COMPANY Income Statement (Variable Costing) Manufacturing overhead Variable < Required A Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4 Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses Campbell Company Incurred manufacturing overhead cost for the year as follows. S S Required A Required B Required C Absorption costing Variable costing Which approach is recommended? Required C > < Required B 0 0 $ 38.30/unit $ 26.60/unit The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an Income statement using absorption costing. b. Prepare an Income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting? Complete this question by entering your answers in the tabs below. $ 11.80/unit $22,800 $ 4,760 $14,700 Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Required C >
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