When all of the units produced are sold, the operating income is the same under both the absorption and variable costing methods. Assume no beginning and ending inventories. Which of the following gives the correct reason for the above statement?
A) All costs incurred have been recorded as expenses.
B) A portion of the fixed manufacturing overhead is still in the Finished Goods Inventory account.
C) All selling and administrative expenses have been recorded as period costs.
D) Fixed manufacturing costs have not been considered when calculating the operating incomes.
A) All costs incurred have been recorded as expenses.
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Engineworks Co. provides the following fixed budget data for the year:Sales (20,000 units) …………………………….?$600,000Cost of sales:?? Direct materials …………………………….. $200,000? Direct labor …………………………………160,000? Variable overhead …………………………..60,000? Fixed overhead ……………………………..80,000500,000Gross profit …………………………………….?$100,000Operating expenses:?? Fixed ………………………………………..$12,000? Variable …………………………………….40,000 52,000Income from operations ………………………..?$ 48,000The company's actual activity for the year follows:??Sales (21,000 units)
…………………………….?$651,000Cost of goods sold:?? Direct materials …………………………….. $231,000? Direct labor …………………………………168,000? Variable overhead …………………………..73,500? Fixed overhead ……………………………..77,500550,000Gross profit …………………………………….?$101,000Operating expenses:?? Fixed ……………………………………….12,000? Variable …………………………………….39,500 51,500Income from operations ……………………….?$ 49,500Required:Prepare a flexible budget performance report for the year using the contribution margin format. What will be an ideal response?
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What will be an ideal response?
Which of the following explains the general shape of the yield curve of a bond?
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