Reconcile the differences each year in net income under the

Reference no: EM13388615

Gardner Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2013, the first year of operations, Gardner produced 4,000 tons of plastic and sold 2,500 tons. In 2014, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,000, variable manufacturing costs were 15% of the sales price of units produced, variable selling expenses were 10% of the selling price of units sold, fixed manufacturing costs were $2,000,000, and fixed administrative expenses were $500,000.

Instructions

(a) Prepare income statements for each year using variable costing.

(b) Prepare income statements for each year using absorption costing.

(d) Comment on the effects of production and sales on net income under the two costing approaches.

Reference no: EM13388615

Questions Cloud

Inventory shrinkages and accidents pertain to which : inventory shrinkages and accidents pertain to which component of direct costs associated with mismanaged organizational

Between 2009 and 2010 quantity of cars produced and sold : between 2009 and 2010 the quantity of cars produced and sold decreased by 20. during the same period the price of cars

Distrust disrespect and animosity pertain to which : distrust disrespect and animosity pertain to which component of indirect costs associated with mismanaged

If price elasticity of demand is -15 and advertising : to increase revenue and profit a firm is considering a 4 increase and an 11 increase in advertising. if the price

Reconcile the differences each year in net income under the : gardner company produces plastic that is used for injection-molding applications such as gears for small motors. in

Over the past 2 decades business schools have added : over the past 2 decades business schools have added required courses on organizational design to many of their

By using information from your readings recognize the three : we have seen many changes and innovations in the application of technology to operations management in recent years.

Which of the following is best defined as consciously : which of the following is best defined as a consciously coordinated social unit composed of two or more people which

The process of stating the basic dilemma and then : the process of stating the basic dilemma and then developing other questions by progressively breaking down the

User Account

All Pages