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Ig Pros inc. calculates income under absorption costing. company provic bonuses to managers in 2021, he Body division has the following financial results: ales (50,000 units) ost of Goods Sold $ 6,000,000 Opening Inventory Cost of Goods Manufactured (60,000 units) Variable Costs 1,500,000 Fixed Costs 1,500,000 3,000,000 nding Inventory OGS ross Margin elling and Admin Expenses -$ 500,000 2,500,000 3,500,000 Variable 500,000 Fixed $ 800,000 1,300,000 "perating Income 2,200,000 he old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022. EQUIRED ) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. ) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.

Ig Pros inc. calculates income under absorption costing. company provic bonuses to managers in 2021, he Body division has the following financial results: ales (50,000 units) ost of Goods Sold $ 6,000,000 Opening Inventory Cost of Goods Manufactured (60,000 units) Variable Costs 1,500,000 Fixed Costs 1,500,000 3,000,000 nding Inventory OGS ross Margin elling and Admin Expenses -$ 500,000 2,500,000 3,500,000 Variable 500,000 Fixed $ 800,000 1,300,000 "perating Income 2,200,000 he old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022. EQUIRED ) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. ) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Big Pros Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021, the Body division has the following financial results: Sales (50,000 units) 6,000,000 Cost of Goods Sold Opening Inventory 2$ Cost of Goods Manufactured (60,000 units) Variable Costs 2$ 1,500,000 Fixed Costs 1,500,000 3,000,000 1 Ending Inventory 2 COGS 3 Gross Margin -24 500,000 $ 2,500,000 3,500,000 4 Selling and Admin Expenses Variable 2$ 500,000 Fixed 2$ 800,000 1,300,000 B Operating Income 2,200,000 O The old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022. 2 REQUIRED 3 A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. 4 B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.
Transcribed Image Text:Big Pros Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021, the Body division has the following financial results: Sales (50,000 units) 6,000,000 Cost of Goods Sold Opening Inventory 2$ Cost of Goods Manufactured (60,000 units) Variable Costs 2$ 1,500,000 Fixed Costs 1,500,000 3,000,000 1 Ending Inventory 2 COGS 3 Gross Margin -24 500,000 $ 2,500,000 3,500,000 4 Selling and Admin Expenses Variable 2$ 500,000 Fixed 2$ 800,000 1,300,000 B Operating Income 2,200,000 O The old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022. 2 REQUIRED 3 A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. 4 B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.
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