Answer in text form without image Dilia Company incurred manufacturing overhead cost for the year as follows:a)Direct materialsDirect laborManufacturing overheadVariableFixed ($25/unit for 1,500 units)Variable selling and administrative expensesFixed selling and administrative expenses$50$ 35S 15Absorption costingVariable costingWhich approach is recommended?S 37,500$ 10,500$ 20,000/unit/unit/unitThe company produced 1,500 units and sold 1,200 of them at $225 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income.Required1. Prepare an income statement using absorption costing.2. Prepare an income statement using variable costing.3. Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting?

Income statement is a financial statement that shows profitability, total revenue and total expenses…

Dilia Company incurred manufacturing overhead cost for the year as follows: a) Direct materials Direct labor Manufacturing overhead Variable Fixed ($25/unit for 1,500 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 50 S 35 S 15 Absorption costing Variable costing Which approach is recommended? $ 37,500 S 10,500 $ 20,000 /unit /unit /unit The company produced 1,500 units and sold 1,200 of them at $225 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required 1. Prepare an income statement using absorption costing. 2. Prepare an income statement using variable costing. 3. Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting?

Dilia Company incurred manufacturing overhead cost for the year as follows: a) Direct materials Direct labor Manufacturing overhead Variable Fixed ($25/unit for 1,500 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 50 S 35 S 15 Absorption costing Variable costing Which approach is recommended? $ 37,500 S 10,500 $ 20,000 /unit /unit /unit The company produced 1,500 units and sold 1,200 of them at $225 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required 1. Prepare an income statement using absorption costing. 2. Prepare an income statement using variable costing. 3. Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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