Variable costing income statement

Assignment Help Accounting Basics

Reference no: EM131135419

The following data were adapted from a recent income statement of Procter & Gamble Company:

(in millions)

Sales ......................................................................... $84,167

Operating costs:

Cost of products sold...................................................... $42,428

Marketing, administrative, and other expenses............................. 30,337 Total operating costs................................................... $72,765

Income from operations ...................................................... $11,402

Assume that the variable amount of each category of operating costs is as follows:

(in millions)

Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,760

Marketing, administrative, and other expenses ................................ 12,135

a. Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period.

b. If Procter & Gamble reduced its inventories during the period, what impact would that have on the income from operations determined under absorption costing?

Reference no: EM131135419

Questions Cloud

How project management team can filter out information : Suggest how the project management team can filter out irrelevant information and target critical information provided by potential users of the new system.

Determine the maturity value of the note : Prefix Supply Company received a 120-day, 8% note for $450,000, dated April 9 from a customer on account. a. Determine the due date of the note.

Write essay on it is difficult to make changes in one life : "It is difficult to make changes in one's life". Do you agree with this statement? -Write a short essay with Introduction, content and conclusion.

About the financial management of her company : (Stewardship and Accountability) The owner of Touring Inc., Mei Chang, is concerned about the financial management of her company. When she started up Touring Inc., a company that provides bus tours in Banff, Alberta, she hired Peter Rosen to mana..

Variable costing income statement : a. Based on the data given, prepare a variable costing income statement for Procter & Gamble Company, assuming that the company maintained constant inventory levels during the period.

Off limit topics include grading and assignments in class : For this assignment, think of something you would like to change at school, where you live, or where you work. It can be a change in a process or how something is completed. You will write a memo to me to persuade me to do what you are asking. Off li..

Interpreting the statement of cash flows : INTERPRETING THE STATEMENT OF CASH FLOWS. Montgomery Ward operates a retail department store chain. It filed for bankruptcy during the first quarter of Year 12. Exhibit 3.27 presents a statement of cash flows for Montgomery Ward for Year 7 to Year..

Block format with closed or mixed punctuation : You work in a bank and need to respond to customer questions and requests received through the mail. A customer's payment was one day late and his account was charged $35 late fee. The customer is asking for a credit of $35 since he thinks it is not ..

Define communication in business : Define communication in business. - State and explain barriers to effective communication. - State ways of achieving effective communication.

User Account

All Pages