Concept explainers
Throughput costing (continuation of 9-23). The variable
- 1. Prepare income statements for EntertainMe in January, February, and March 2017 under throughput costing.
Required
- 2. Contrast the results in requirement 1 of this exercise with those in requirement 1 of Exercise 9-23.
- 3. Give one motivation for EntertainMe to adopt throughput costing.
9-23 Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses
The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
- 1. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing.
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