Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost. The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable. Requirement 1 To determine: The product cost under cost absorption costing and under variable costing.

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Answer 1

Question

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

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Summarize the financial components included in the current assets and liabilities section of the Balance Sheet for the given company. Explain why the balance sheet is arranged the way it is. Determine if the same asset or liability can have both short-term and long-term components and provide your rationale. Explain how variances in data can be detected for current assets and liabilities using relevant tools. Justify why footnotes for current assets and liabilities are important in decision making for the company. Include the following details in your response: Explain why the balance sheet amounts alone are not sufficient in providing the information needed in decision making. Explain why FIFO is the best choice for this given company. Cite the applicable FASB codification section for the following items as a list: cash and cash equivalents, inventory, and receivables.

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Answer 2

Question

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Expert Solution & Answer

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Answer 3

Question

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Expert Solution & Answer

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Answer 5

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Answer 6

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

Answer 7

Chapter 21, Problem P21A.66BPGB

To determine

Income Statements under variable and absorption costing: There are two different ways to prepare income statement. The conventional way which is generally seen in the financial statement as well is preparing income statement under absorption costing. In the absorption costing, there is not segregation of the costs on the basis of fixed costs and variable cost.

The other way to prepare income statement is variable costing. Under this method or costing, the expenses are segregated on the basis of fixed and variable.

Requirement 1

To determine:

The product cost under cost absorption costing and under variable costing.

Answer 8

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

Answer 9

To determine

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

Answer 10

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Answer 11

To determine

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 21 - For Frank’s Funky Sounds, straight-line...Ch. 21 - Prob. 2QC Ch. 21 - Prob. 3QC Ch. 21 - Prob. 4QC Ch. 21 - Prob. 5QC Ch. 21 - On a CVP graph, the total cost line intersects the...Ch. 21 - If a company increases its sales price per unit...Ch. 21 - Prob. 8QC Ch. 21 - Prob. 9QC Ch. 21 - Prob. 10QC

Requirement 2: To prepare: Income statements for January under – a. Absorption costing b. Variable costing

Requirement 3: To determine: Higher Operating income for January under absorption costing and variable costing.

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Chapter 21 Solutions

Requirement 2:

To prepare:

Income statements for January under –

a. Absorption costing

b. Variable costing

Requirement 3:

To determine:

Higher Operating income for January under absorption costing and variable costing.