Variable costing: The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold. Requirement 1: Prepare Company W’s income statement in the contribution format using variable costing.

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Answer 1

Question

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

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Question

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Answer 6

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

Answer 7

Chapter 4, Problem 4.12E

1.

To determine

Concept introduction:

Variable costing:

The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold.

Requirement 1:

Prepare Company W’s income statement in the contribution format using variable costing.

Answer 8

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Answer 9

2.

To determine

Concept introduction:

Absorption costing:

The method of costing where both fixed and variable costs are charged to the products Absorption costing absorbs the costs which are directly related to the product. The fixed overheads are charged to all units manufactured regardless of the output.

Requirement 2:

Calculate the difference between the operating income using the absorption costing method and the variable costing method.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4 - Prob. 4.1Q Ch. 4 - Prob. 4.2Q Ch. 4 - Prob. 4.3Q Ch. 4 - Prob. 4.4Q Ch. 4 - Prob. 4.5Q Ch. 4 - Prob. 4.6Q Ch. 4 - Prob. 4.7Q Ch. 4 - Prob. 4.8Q Ch. 4 - Prob. 4.9Q Ch. 4 - Prob. 4.10Q

Variable costing: The method of costing where only variable costs are charged to the products is called as variable costing. The fixed overheads are charged to the units which are sold. Requirement 1: Prepare Company W’s income statement in the contribution format using variable costing.

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Chapter 4 Solutions