Managerial Accounting
Managerial Accounting
14th Edition
ISBN: 9781337270595
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 6, Problem 2BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decisions. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead is treated as period (fixed) expense.

The variable costing income from operations is greater than or lesser than the absorption costing income from operations.

(b)

To determine

The difference between variable costing income from operations and absorption costing income from operations.

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Managerial Accounting

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