Answered: What is variable costing? How does it…

What is variable costing? How does it differ from absorpotion costing? Which can better be used to manipulate the income statement and how?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 9Q: How is a contribution margin determined, and why is it important to management?

See similar textbooks

Related questions

Q: Dehner Corporation uses a job-order costing system with a single plantwide predeter based its…

A: The manufacturing overhead is applied to the production on the basis of pre-determined overhead…

Q: 2.1 Write up the asset and liability and capital accounts to record the following transactions in…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Africa Traders is not a registered VAT vendor and buys and sells furniture. Africa Traders sold a…

A: A non-VAT registered trader is not allowed to charge value-added tax when the sales are made.…

Q: On January 1, 2020, Pearl Company makes the two following acquisitions. 1. 2. (a) Purchases land…

Q: On January 1, Year 2, the following information was drawn from the accounting records of Carter…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Deedee's Hair Products decided to issue 97 shares of $3 par common stock. When recording the…

A: Lets understand the basics. Additional paid in capital is a capital received in excess of par value…

Q: Chapter 2 Financial Statements L. Bong Lee, owner of Champion Forwarders, follows the calendar year…

A: Adjusting entries are those journal entries which are passed at the end of accounting period for the…

Q: The statement of Profit and Loss and other Comprehensive Income and the Statement of Financial…

A: Cash Flow Statement is one of the financial statement which shows all cash inflows and cash outflows…

Q: Errors in Equivalent Unit Computation Napco Refining Company processes gasoline. On June 1 of the…

A: Equivalent units are number of units that are completed or manufactured in the particular period.…

Q: Problem Compute for the equivalent units of production in each of the following cases: Case A In…

A: I'm using weighted average method because it is commonly used. Weighted Average Method :— Under…

Q: Transaction #1 (May 4, 2019) - the hospital signed a purchase order for a $2,500 supply purchase,…

A: In transaction 1 which occurred on May 4, 2019, a purchase order has been signed by the hospital for…

Q: Gamma Corporation has been in business for 6 years as of 2021. Management presents 2-year…

Q: What property tax rate should Freetown have if it has a homestead exemption of $20,000.

A: Property tax rate is the rate which has been specified and given by the government and this rate is…

Q: What are Check Digits?

A: CHECK DIGITS A check digit is a form of control input that is used to detect mistakes that happen…

Q: How do you know if a journal is reputable?

A: there are some ways that can be used to know whether a journal is reputable or not such as: 1) at…

Q: Cost of goods manufactured during 2006 is $240, WIP inventory on December 31, 2006 is $50. WIP…

A: Manufacturing cost is the aggregate of direct materials, direct labor, and manufacturing overhead.…

Q: Mr and Mrs. Klein’s joint return reports $285,000 salaries and $15,000 qualified dividends. Their…

A: Salaries: $285,000 Qualified dividends: $15,000 Taxable income: $270,000 Total tax liability: ?

Q: On January 1, 2021, Milk Tea Inc. purchased 12% bonds with face amount of P5,000,000 for P5,500,000…

A: INTRODUCTION Bonds often known as investment instruments, used by governments and corporations to…

Q: Use the formatted answer sheet template provided to analyze the effects of each of transaction on…

A: Bonds refer to investment securities where an investor lends money to a company or a government for…

Q: On Sept 1, 20X1, Orange Co borrowed P240,000 from ABC Bank to fund a new business venture. Orange…

A: Notes Payable - Notes Payable is the promissory notes issued by the company that borrows the amount…

Q: a. Assume that the net cash inflow from financing activities of $13,900 was caused by three events.…

A: Net cash flow from the financing activities is the cash flow which has been in net means the inflow…

Q: Leased assets On January 1, 2021, the chief operating officer of New Belgium, Jeff Stambaugh,…

A: Introduction: A journal entry is used to record a business transaction in the company's accounting…

Q: The financial condition of two companies Assets = Liabilities + $ 11,000 = $ 7,590 + $ 12,724 = $…

A: Generally dividends are paid out of accumulated profits earned by a company.Accumulated profits…

Q: Why do firms not have sunk costs over time? How should managers approach sunk costs when deciding…

A: Answer:- Sunk cost meaning:- Money which has been already spent and cannot be recouped is known as…

Q: Prepare a value analysis schedule for this business combination. Check Number – Goodwill $40,000

A: parent company holds 80% stake in subsidiary purchase consideration is 280,000 dollars

Q: Professional Products Inc., a wholesaler of office products, was organized on February 5 of the…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: Distinguish between assets and liabilities and provide three (3) examples of each to support your…

A: Introduction: Liabilities can be either short-term or long-term. Short-term obligations are…

Q: a job-order costing system with a sin rate based on machine-hours. The co. ad rate for the current…

A: Plant wide overhead rate uses a single overhead rate to allocate total manufacturing cost to units .

Q: Which of the following statements are true? 1. Variable costs per unit are not affected by changes…

A: Fixed costs: Fixed costs are those costs that do not vary with changes in the level of activity.…

Q: Can free cash flow continue to grow, even if ROIC falls? Explain.

A: If the working capital of the company can be managed free cash flow can grow at a better rate even…

Q: The following list depicts several of the sample fair value measurements. For each asset or…

A: Fair value is a the price that would be received to sell an asset or paid to transfer a liability in…

Q: of $300,000, which he summed together and calculated as follows: case, and what should he do to…

A: The spreadsheet of account consists of adjusted trial balance, cash flow statement, income…

Q: Financial update as of June 15 • Your existing business generates $75,000 in EBIT. • The corporate…

A: Free Cash Flow Formula: FCF = EBIT * (1-Tax rate) + Depreciation - Net Working capital

Q: 1) Describe the difference between accrual and cash basis accounting.

A: Cash system of accounting means where all expenses , losses , income and gain are recognized on the…

Q: QUESTION 22

A: The contribution to sales will be shown as the percentage of the total sales. That is contribution…

Q: could you answer part B please? Pagle Corporation established a subsidiary to enter into a new line…

A: Introduction: A journal entry is used to record a business transaction in a company's accounting…

Q: LO.2 On January 1, 2020, Kunto, a cash basis taxpayer, pays $46,228 181 to yield 4% (the effective…

A: Gross Income Wages, dividends, capital gains, company revenue, retirement distributions, and other…

Q: The company paid by cheque a creditor called Somato Ltd 54,000 on 24th Jan 2018 The account that…

A: Debit and credit are two aspects of double entry system. It is important to record both the aspects…

Q: is the predicted amount of receiving report costs for a month (assume a month is exactly four weeks)…

A: By using least square method , we will find the answer to the following above question Please find…

Q: What is the correct accounting entry for a cash discount of $5,000 received by a company from a…

A: Lets understand the basics. Journal entry is required to make to record event and transaction that…

Q: ts) Based on our discussions, why was the Allowance for Bad Debt created? O To record the amount of…

A: The allowance for doubtful accounts, also known as a bad debt reserve, is management's prediction of…

Q: A Month in the Life of a Faculty from cash vs. accrual accounting perspective The Faculty provides…

A: Income statement: The income statement is the most important part of the financial statement. this…

Q: Shipping Inc.'s transactions during January 2022: 1. Jan. 1 - Issued 10,000 shares of no-par common…

A: Closing entries : These are the entries made at end of year to transfer the amount from temporary…

Q: four financial statements

A: Financial statements are documents that describe a company's operations and financial performance.…

Q: M4 Engineering began operations in January of 2020. M4 Engineering provides structural engineering…

A: Journal Entries - Journal Entries are the primary record of transactions entered into by the company…

Q: Were these instances of tax avoidance or evasion (define? Letter of the law vs spirit of the law)…

A: A person or any business earns the income or the profit respectively during the year and for which…

Q: An eco-industrial park has a manufacturing plant which purchased a lathe machine for P57,500 seven…

A: Answer:- Depreciation meaning:- Depreciation can be defined as the accounting method which is…

Q: Balance sheet information for parent Company and its 90%-owned subsidiary, Sub Corporation, at…

A: The question is based on the concept of Consolidated Financial Statements. It is the responsibility…

Q: The equivalent units of production eTextbook and Media Unit costs $ Determine the unit costs of…

A: Introduction: In a mass production of identical products process costing is used. In process costing…

Q: Wright reported the following balances in their PP&E accounts: Equipment Accumulated Depreciation…

A: Depreciation on the asset is the expense which is computed to report the regular wear and tear on…

Question

Q: What is variable costing? How does it differ from absorpotion costing? Which can better be used to manipulate the income statement and how? Why would management do this?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

When is multiple regression required to explain cost behavior?
What is kaizen costing? On which part of the value chain does kaizen costing focus?
How is a contribution margin determined, and why is it important to management?
What does it mean to obtain a competitive advantage? What role does the cost management system play in helping to achieve this goal?
Which of the following is not a method used by managers to determine cost behavior? High-low Method Scatterplot Account analysis Regression Analysis Derivation
Why do managers consider direct costs to be more accurate than indirect costs?
What are the consequences of broad averaging on costs? Explain?
Is variable or absorption costing a better method of computing income from operations? Why?
How do managers decide whether a cost is avariable or a fixed cost?
Why do managers consider Direct Coasts to be more accurate than Indirect Costs? How do managers decide whether a cost is a Variable or a Fixed cost? or other important and useful issues/information.
When making decisions, managers should consider a. revenues that differ between alternatives. b. costs that do not differ between alternatives. c. only variable costs. d. sunk costs in their decisions.
A. What is the net income under variable costing method?B. What is the net income under absorption costing method?