Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $157. The varlable and fixed cost data are as follows Direct labor $100.00 Overhead Variable cost per unit $9 Fixed cost Marketing general and administrative Variable cost (per service contract completed) Administrative expenses (foxed- annual cost) $100.000 $10.00 $42,000 During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. a. Calculate reported income for management.
Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $157. The varlable and fixed cost data are as follows Direct labor $100.00 Overhead Variable cost per unit $9 Fixed cost Marketing general and administrative Variable cost (per service contract completed) Administrative expenses (foxed- annual cost) $100.000 $10.00 $42,000 During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. a. Calculate reported income for management.
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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