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Waley Corporation, a merchandising company reported sales of 7,400 unite for May at a selling price of $677 per unit. The cost of goods sold ( all variable) was $441 per unit and the variable selling expense was $54 per unit. The total fixed selling expense was $155,600. The variable administrative expense was $24 per unit and the total fixed administrative expense was $370,400.
Required:
a. Prepare a contribution format income statement for May.
b. Prepare a traditional format income statement for May.
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As with any costing system, a firm should use activity-based costing (ABC) when the:
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