9-34 Reconciliation of operating income under absorption and variable techniques. Johnson Stores produce and sell face p

[answerhappygod]

9 34 Reconciliation Of Operating Income Under Absorption And Variable Techniques Johnson Stores Produce And Sell Face P 1 (257.26 KiB) Viewed 16 times

9-34 Reconciliation of operating income under absorption and variable techniques. Johnson Stores produce and sell face powder called the 'Success' in cases. Each case is sold for £80. The following infor- mation relates to the product in the autumn and summer of 2020: Autumn Summer Direct materials Direct labor £136,800 £146,880 Variable manufacturing overhead 133,950 143,820 Fixed manufacturing overhead 71,250 76,500 Fixed selling expenses 120,000 122,000 Variable selling expenses 25,500 25,500 Admin expenses: 42,750 45,900 Variable (10% of sales value) Fixed (25% of sales value) Other related information: Autumn Summer 23,400 35,700 Sales Production 28,500 30,600 Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of £470,400. Assume that there will be no inventory held on January 1, 2020. 1. Prepare profit statement for each of the two quarters using absorption and variable costing techniques. 2. Compute and reconcile the differences in the operating incomes of both techniques. 3. Comment on the differences in the operating incomes of both techniques.