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Prepare a variable-costing income statement for blue spruce

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Reference no: EM132944314

Blue Spruce manufactures swivel seats for customized vans. It currently manufactures 23,200 seats per year, which it sells for $728 per seat. It incurs variable costs of $364 per seat and fixed costs of $5,127,200. It is considering automating the upholstery process, which is now largely manual. It estimates that if it does this, its fixed costs will be $6 million, and its variable costs will drop to $325 per seat.

Problem 1: Prepare a variable-costing income statement based on current activity.

Reference no: EM132944314

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