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Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory Ending inventory $11,266 11,402 Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount Variable cost of goods sold:

Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory Ending inventory $11,266 11,402 Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount Variable cost of goods sold:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory Ending inventory $11,266 11,402 Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount Variable cost of goods sold:
Transcribed Image Text:Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory Ending inventory $11,266 11,402 Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount Variable cost of goods sold:
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