Campbell Company Incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead Variable Fixed ($19.00/unit for 1,200 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 38.30/unit $ 26.60/unit $ 11.80/unit $22,800 $ 4,760 $14,700 The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4
Campbell Company Incurred manufacturing overhead cost for the year as follows.
Direct materials
Direct labor
Manufacturing overhead
Variable
Fixed ($19.00/unit for 1,200 units)
Variable selling and administrative expenses
Fixed selling and administrative expenses
The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent
bonus based on the company's net income.
Required
a. Prepare an Income statement using absorption costing.
b. Prepare an income statement using variable costing.
c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?
Required A Required B Required C
Prepare an income statement using absorption costing.
$ 38.30/unit
$ 26.60/unit
Complete this question by entering your answers in the tabs below.
Cost of goods Sold
$ 11.80/unit
$22,800
$ 4,760
$14,700
CAMPBELL COMPANY
Income Statement
(Absorption Costing)
< Required A
$
$
0
0
Required B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdead88a2-0ef7-48c9-8d78-426ba1780967%2F9d3453a5-2457-4e23-aa0b-0864e4b04f19%2Flku25k_processed.png&w=3840&q=75)
![Required
a. Prepare an income statement using absorption costing.
b. Prepare an income statement using variable costing.
c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
Prepare an income statement using variable costing.
Variable costs
Direct materials
Direct labor
CAMPBELL COMPANY
Income Statement
(Variable Costing)
Manufacturing overhead
Variable
< Required A
Exercise 11-16A (Algo) Variable costing versus absorption costing LO 11-4
Fixed ($19.00/unit for 1,200 units)
Variable selling and administrative expenses
Fixed selling and administrative expenses
Campbell Company Incurred manufacturing overhead cost for the year as follows.
S
S
Required A Required B Required C
Absorption costing
Variable costing
Which approach is recommended?
Required C >
< Required B
0
0
$ 38.30/unit
$ 26.60/unit
The company produced 1,200 units and sold 700 of them at $180.40 per unit. Assume that the production manager is paid a 2 percent
bonus based on the company's net income.
Required
a. Prepare an Income statement using absorption costing.
b. Prepare an Income statement using variable costing.
c. Determine the manager's bonus using each approach. Which approach would you recommend for Internal reporting?
Complete this question by entering your answers in the tabs below.
$ 11.80/unit
$22,800
$ 4,760
$14,700
Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? (Round
your intermediate calculations and final answers to the nearest whole dollar amount.)
Required C >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdead88a2-0ef7-48c9-8d78-426ba1780967%2F9d3453a5-2457-4e23-aa0b-0864e4b04f19%2Fzul0n8v_processed.jpeg&w=3840&q=75)
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