The annual data that follow pertain to Al's Awesome Eyewear, a manufacturer of swimming goggles. (Ar's Awesome Eyewear had no beginning Finished Goods Inventory in January.) (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Al's Awesome Eyewear for the year ended December 31. (Round intermediary calculations to the nearest cent.) Begin by preparing Al's Awesome Eyewear's conventional (absorption costing) income statement for the year ended December 31. Al's Awesome Eyewear Income Statement (Absorption Costing) Year Ended December 31 Operating Income Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Al's Awesome Eyewear for the year ended December 31. 2. Which statement shows the higher operating income? Why? 3. Al's Awesome Eyewear's marketing vice president believes a new sales promotion that costs $270,000 would increase sales to 145,000 goggles. Should the company go ahead with the promotion? Give your reasoning Print Done X Data table Number of goggles produced Number of goggles sold Sales price per unit Variable manufacturing cost per unit Sales commission cost per unit Fixed manufacturing overhead Fixed selling and administrative costs Print Done $ 160,000 115,000 30 16 1 800,000 210,000 X
The annual data that follow pertain to Al's Awesome Eyewear, a manufacturer of swimming goggles. (Ar's Awesome Eyewear had no beginning Finished Goods Inventory in January.) (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Al's Awesome Eyewear for the year ended December 31. (Round intermediary calculations to the nearest cent.) Begin by preparing Al's Awesome Eyewear's conventional (absorption costing) income statement for the year ended December 31. Al's Awesome Eyewear Income Statement (Absorption Costing) Year Ended December 31 Operating Income Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Al's Awesome Eyewear for the year ended December 31. 2. Which statement shows the higher operating income? Why? 3. Al's Awesome Eyewear's marketing vice president believes a new sales promotion that costs $270,000 would increase sales to 145,000 goggles. Should the company go ahead with the promotion? Give your reasoning Print Done X Data table Number of goggles produced Number of goggles sold Sales price per unit Variable manufacturing cost per unit Sales commission cost per unit Fixed manufacturing overhead Fixed selling and administrative costs Print Done $ 160,000 115,000 30 16 1 800,000 210,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The annual data that follow pertain to Al's Awesome Eyewear, a manufacturer of swimming goggles. (Al's Awesome Eyewear had no beginning Finished Goods Inventory in January.)
(Click the icon to view the data.)
Read the requirements.
Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Al's Awesome Eyewear for the year ended December 31. (Round intermediary calculations to the nearest cent.)
Begin by preparing Al's Awesome Eyewear's conventional (absorption costing) income statement for the year ended December 31.
Al's Awesome Eyewear
Income Statement (Absorption Costing)
Year Ended December 31
Operating Income
Requirements
1. Prepare both conventional (absorption costing) and contribution margin
(variable costing) income statements for Al's Awesome Eyewear for the year
ended December 31.
2. Which statement shows the higher operating income? Why?
3. Al's Awesome Eyewear's marketing vice president believes a new sales
promotion that costs $270,000 would increase sales to 145,000 goggles.
Should the company go ahead with the promotion? Give your reasoning.
Print
Done
- X
Data table
Number of goggles produced
Number of goggles sold
Sales price per unit
Variable manufacturing cost per unit
Sales commission cost per unit
Fixed manufacturing overhead
Fixed selling and administrative costs
Print
Done
$
160,000
115,000
30
16
1
800,000
210,000
X
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