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Finance & Accounting
Pages 3 (753 words)
Conversion of Income Statement for the 1st Quarter into Contribution Margin Costing Approach Income Statement for 1st Quarter Contribution Margin Costing Approach Per unit Amount Production 25,000 Sales 100 2,500,000 Variable Cost 62 (1,550,000) Contribution Margin 950,000 Fixed Cost (600,000) Net Income 350,000 Income Statement for 2nd Quarter under Absorption Costing Approach Income Statement for 2nd Quarter Absorption Costing Approach Sales 2,500,000 Cost of Goods Sold (1,800,000) Gross Profit 700,000 Selling and Admin expenses (350,000) Net Profit 350,000 Income Statement for 2nd Quarter under Contribution Margin Approach Income Statement for 2nd Quarter Contribution Margin
al Production Cost 3,100,000 Total Production Units 50,000 Production Cost Per Unit 62 Performance for the 2nd Quarter As far as the improvements are considered for the 2nd quarter, the assessment for Mr. Rosen is not under right direction. The information that they had provided, gives the same amount of net income under both approaches. Sales are same for both these approaches. However, the costing side is affected by these two approaches such that the costs are broken up on different methods under the two approaches. ...
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