Problem 3 (Variable Costing Income Statement; Reconciliation) During Floppy'Company's first two years of operations, the company reported net operating income as follows (absorption costing basis): Year 1 Year 2 Sales (at P50 per unit) Less cost of goods sold: Beginning inventory Add cost of goods manufactured (at P34 per unit) Goods available for sale P1,000,000 P1,500,000 170,000 850,000 850,000 170,000 680,000 320,000 310,000 P 10,000 850,000 1,020,000 Less ending inventory (at P34 per unit) Cost of goods sold Gross margin Less selling and administrative expenses* Net operating income 1,020,000 480,000 340,000 P 140,000 * P3 per unit variable; P250,000 fixed each year.
Problem 3 (Variable Costing Income Statement; Reconciliation) During Floppy'Company's first two years of operations, the company reported net operating income as follows (absorption costing basis): Year 1 Year 2 Sales (at P50 per unit) Less cost of goods sold: Beginning inventory Add cost of goods manufactured (at P34 per unit) Goods available for sale P1,000,000 P1,500,000 170,000 850,000 850,000 170,000 680,000 320,000 310,000 P 10,000 850,000 1,020,000 Less ending inventory (at P34 per unit) Cost of goods sold Gross margin Less selling and administrative expenses* Net operating income 1,020,000 480,000 340,000 P 140,000 * P3 per unit variable; P250,000 fixed each year.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 4MCQ
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![Problem 3 (Variable Costing Income Statement; Reconciliation)
During Floppy Company's first two years of operations, the company reported
net operating income as follows (absorption costing basis):
Year 1
Year 2
Sales (at P50 per unit)
Less cost of goods sold:
Beginning inventory
Add cost of goods manufactured
(at P34 per unit)
Goods available for sale
P1,000,000
P1,500,000
170,000
850,000
850,000
170,000
680,000
320,000
310,000
P 10,000
850,000
1,020,000
Less ending inventory (at P34 per unit)
Cost of goods sold
Gross margin
Less selling and administrative expenses*
Net operating income
1,020,000
480,000
340,000
P 140,000
P3
per
unit variable; P250,000 fixed each year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75c3e581-7610-4f65-813f-3fc3850608c9%2Fddaf48bc-eb8a-495f-9825-4741668b8d8f%2F82axfa6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 3 (Variable Costing Income Statement; Reconciliation)
During Floppy Company's first two years of operations, the company reported
net operating income as follows (absorption costing basis):
Year 1
Year 2
Sales (at P50 per unit)
Less cost of goods sold:
Beginning inventory
Add cost of goods manufactured
(at P34 per unit)
Goods available for sale
P1,000,000
P1,500,000
170,000
850,000
850,000
170,000
680,000
320,000
310,000
P 10,000
850,000
1,020,000
Less ending inventory (at P34 per unit)
Cost of goods sold
Gross margin
Less selling and administrative expenses*
Net operating income
1,020,000
480,000
340,000
P 140,000
P3
per
unit variable; P250,000 fixed each year.
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