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bthakkar25
20.06.2020 •
Business
Octavius Company produces a 10-inch chef knife used by commercial chefs. The knives sell for $58 each. In 2014, the company produced 49,000 units and sold 43,700 units. There was no beginning inventory. Following are variable and full costing income statements for 2014.
Income Statement Prepared Using Variable Costing
Octavius Company
Income Statement
For the Year Ending December 31, 2014
Sales
$2,534,600
Less variable costs:
Variable cost of goods sold $651,000 $799,000
Variable selling expense 148,000
Contribution margin 1,735,600
Less fixed costs:
Fixed manufacturing expense 524,300
Fixed selling expense 156,100
Fixed administrative expense 104,000 784,400
Net income $951,200
Income Statement Prepared Using Full Costing
Octavius Company
Income Statement
For the Year Ending December 31, 2014
Sales $2,534,600
Less cost of goods sold 1,118,590
Gross margin 1,416,010
Less selling and administrative expenses:
Selling expense $304,100
Administrative expense 104,000 408,100
Net income $1,007,910
Reconcile the difference in profit between the two income statements. (Round cost per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g.125.)
Reconciliation Statement
Net income under variable costing $
: $
Net income under full costing
$
Solved
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Ответ:
Debt is much less risky for the investor because the firm is legally obligated to pay it. ... Debt is a lower cost source of funds and allows a higher return to the equity investors by leveraging their money.
Explanation: your welcome