The volume of production in a period has an effect on income calculated using absorption costing but has no effect on income calculated using variable costing. Explain.
Answer to relevant QuestionsHow are joint costs allocated under variable costing? Use the information from Exercise 14.18. The production variable cost ($40,000) includes $25,000 in direct materials and $15,000 in direct labor.REQUIREDA. Using the throughput costing method: (1) Calculate the cost of ...Maine Lobster Company is a privately held company that buys lobsters from local fishermen and then delivers them to restaurants in several of Maine’s larger cities. The owners use variable costing income statements, but ...Explain why no volume variance occurs when variable costing is used.Explain how and why the use of ROI for performance evaluation can cause managers to make decisions that could be harmful to an organization in the long run.
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