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Income statement preparation using contribution and Absorption Costing
Straightforward Income Statements
The Independence Company had the following manufacturing data for the year 2006 (in thousands of dollars). Beginning and ending inventories none
Direct material used $400 Direct labor 330 Supplies 20 Utilities-variable portion 40 Utilities-fixed portion 12 Indirect labor-variable portion 90 Indirect labor-fixed portion 40 Depreciation 200 Property taxes 20 Supervisory salaries 50 Selling expenses were $300,000 (including $60,000 that were variable) and general administrative expenses were $144,000 (including $23,000 that were variable). Sales were $1.8 million.
Direct labor and supplies are regarded as variable costs. 1. Prepare two income statements, one using the contribution approach and one using the absorption approach.
2. Suppose that all variable costs fluctuate directly in proportion to sales and that fixed costs are unaffected over a very wide range of sales. What would operating income have been if sales had been $2.0 million instead of $1.8 million? Which income statement did you use to help obtain your answer? Why?
Celeste contributed business-related assets valued at $250,000 (basis of $100,000) in exchange for her 50% interest in the Celestine Partnership.
determine the rate variance, time variance, and total direct labor cost variance. discuss what might have caused these variances.
A company had inventory of 8 units at a cost of $12 each on December 1. On December 2, they purchased 8 units at $21 each. On December 6 they purchased 7 units at $23 each. On December 8, they sold 18 units for $52 each. Using the LIFO perpetual i..
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Compute net cash provided by operating activities using the indirect method assuming that net income is $180,980.
ACCT19062 Issues in Financial Reporting, : Recognition of Assets and Liabilities in the Financial Statements,
Logan’s actual manufacturing overhead for the year was $741,189 and its actual total direct labor was 35,500 hours. What is the predetermined overhead rate?
Research this question and can not find a set forth answer list of countries that have adopted IFRS and how cultural differences can impact interpretation of IFRS.
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