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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Franklin Company had a beginning raw materials inventory of $9,500. During the period, the company purchased $52,000 of raw materials on account. If the ending balance in raw materials was $7,000, what is the amount of raw materials transferred to work in process inventory? I. $54,500 II. $50,500 III. $44,000 IV. $52,000

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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Check out a sample textbook solution

See solution

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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Check out a sample textbook solution

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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Check out a sample textbook solution

See solution

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.