(a)The vice-president, sales is not comfortable with the variable-costing system and wonders what the net income would have beenunder the previous absorption-costing system.1. Present the November income statement on an absorption-costing basis.Sales in unitsSWEET ACACIACORPORATIONAbsorption-Costing Income StatementFor the Month Ended November 30, 20222. Reconcile and explain the difference between the variable-costing and absorption-costing net income figures.Variable-costing net incomeFMOH deferred in ending inventoryFMOH released from beginning inventoryAbsorption-costing net income$$ Current Attempt in ProgressThe vice-president, sales of Sweet Acacia Corporation has received the following income statement for November, which wasprepared on a variable-costing basis. The firm has just adopted variable costing for its internal reporting.SalesLess variable cost of goods soldContribution marginLess fixed manufacturing costs at budgetGross marginLess fixed selling and administrative costsNet income before taxes1.2.SWEET ACACIACORPORATIONIncome Statement3.For the Month of November(in thousands)4.Variable costsFixed costs appliedTotal cost5.The controller attached the following notes with the statements:6.$17$3,4001,7001,7004600$211,100The unit sales price for November averaged $34.The unit manufacturing costs for the month were as follows:400$700The unit rate for fixed manufacturing costs is a predetermined rate based on a monthly production of 150,000 units.The variable costs per unit have been stable all year.Production for November was 44,450 units in excess of sales.The inventory at November 30 was 96,800 units.

Absorption costing also called as historical costing is the practice of charging both fixed and…

Answered: The vice-president, sales of Sweet…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The vice-president, sales of Sweet Acacia Corporation has received the following income statement for November, which was prepared on a variable-costing basis. The firm has just adopted variable costing for its internal reporting.