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Author Question: The manager of the manufacturing division of Iowa Windows does not understand why income went down ... (Read 39 times)

rl

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on: Mar 6, 2021
The manager of the manufacturing division of Iowa Windows does not understand why income went down when sales went up. Some of the information he has selected for evaluation include:

JanuaryFebruary
Units produced40,00030,000
Units sold30,00040,000 
Sales$600,000$800,000
Beginning inventory0150,000
Cost of production600,000550,000
Ending inventory150,0000
Operating income70,00035,000 

The division operated at normal capacity during January.
Variable manufacturing cost per unit was $5, and the fixed costs were $400,000.
Selling and administrative expenses were all fixed. 

Required:
Explain the profit differences. How would variable costing income statements help the manager understand the division's operating income?
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by rl on Mar 6, 2021

bdobbins

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Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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rl

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Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)

alvinum

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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