Gary needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costing system used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the analysis. The variable manufacturing and variable operating costs were $18 per unit and $3 per unit, respectively. Budgeted and actual fixed-MOH cost was $18,000, while fixed operating costs were $12.200. The company budgeted for 1.800 units but produced and sold 1,900 units this year. Any fixed-MOH volume variance is to be written off directly to COGS. Gary knew there were no variable cost variances. Show the COGS that would be presented on the company's income statement under (a) variable costing and (b) absorption costing COGS $ Variable Costing Absorption Costing

Gary needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costing system used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the analysis. The variable manufacturing and variable operating costs were $18 per unit and $3 per unit, respectively. Budgeted and actual fixed-MOH cost was $18,000, while fixed operating costs were $12.200. The company budgeted for 1.800 units but produced and sold 1,900 units this year. Any fixed-MOH volume variance is to be written off directly to COGS. Gary knew there were no variable cost variances. Show the COGS that would be presented on the company's income statement under (a) variable costing and (b) absorption costing COGS $ Variable Costing Absorption Costing

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Description: Gary needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costingsystem used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the anal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Gary needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costing
system used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the analysis. The
variable manufacturing and variable operating costs were $18 per unit and $3 per unit, respectively. Budgeted and actual fixed-MOH
cost was $18,000, while fixed operating costs were $12,200. The company budgeted for 1.800 units but produced and sold 1,900 units
this year. Any fixed-MOH volume variance is to be written off directly to COGS. Gary knew there were no variable cost variances.
Show the COGS that would be presented on the company's income statement under (a) variable costing and (b) absorption costing.
Variable Costing
COGS
$
$
Absorption Costing

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