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Wariable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory $11,266 11,402 Ending inventory Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount

Wariable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory $11,266 11,402 Ending inventory Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Amount Amount

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 22BEA: Inventory Valuation under Variable Costing Refer to the data for Judson Company above. Required: 1....
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Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory $11,266 11,402 Ending inventory Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Sales Variable cost of goods sold: Amount Amount $ 41,748
Transcribed Image Text:Variable and Absorption Costing The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: (in millions) $41,748 $(29,082) (8,113) $(37,195) $4,553 Sales Cost of goods sold Selling, administrative, and other expenses Total expenses Operating income Assume that $10,575 million of cost of goods sold and $5,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Beginning inventory $11,266 11,402 Ending inventory Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Sales Variable cost of goods sold: Amount Amount $ 41,748
a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest mill Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Sales Variable cost of goods sold: Beginning inventory Variable cost of goods manufactured Ending inventory Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Amount Amount 41,748 0000
Transcribed Image Text:a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest mill Caterpillar Inc. Variable Costing Income Statement (assumed) For the Year Ended December 31 Line Item Description Sales Variable cost of goods sold: Beginning inventory Variable cost of goods manufactured Ending inventory Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Amount Amount 41,748 0000
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