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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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P7-2A | Variable and Absorption Costing---Service Company | ||||
Jensen's Tailoring provides custom tailoring services. After the company's first year of operations, its owner prepared the following summarized data report for 2019: | |||||
Sales (500 completed jobs) | $ 100,000 | ||||
Tailoring costs (550 jobs): | |||||
Direct labor | 47,000 | ||||
Manufacturing |
|||||
Variable | 12,000 | ||||
Fixed | 9,000 | ||||
Operating expenses: | |||||
Variable | 5,600 | ||||
Fixed | 5,800 | ||||
Required | |||||
a. Prepare an income statement based on full absorption costing. (Round ending inventory to the nearest $.) | |||||
b. Prepare an income statement based on variable costing. (Round ending inventory to the nearest $.) | |||||
c. Assume that you must decide quickly whether to accept a special one-time order to alter 50 band costumes for $125 per costume. Which income statement presents the most relevant data? Determine the apparent profit or loss on the special order based solely on these data. | |||||
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I am having troubke understanding how to find the ending inventory. Would you mind helping me with that?
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