1 Question 2Big Pros Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021,the Body division has the following financial results:4 Sales (50,000 units)6,000,0005 Cost of Goods SoldOpening InventoryCost of Goods Manufactured (60,000 units)78Variable Costs1,500,000Fixed Costs1,500,0001011 Ending Inventory3,000,000500,00012 COGS13 Gross Margin14 Selling and Admin Expenses15161718 Operating Income192$2,500,0003,500,000Variable500,000Fixed800,0001,300,0002,200,00020 The old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022.2122 REQUIRED23 A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work.24 B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation.

Name: 1 Question 2Big Pros Inc. calculates income under absorption costing.
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Description: 1 Question 2Big Pros Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021,the Body division has the following financial results:4 Sales (50,000 units)6,000,0

In absorption costing we consider both variable and fixed costs as cost of…

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iculates incon tion costing. company to managers based oH operating of the division. In

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 39E: Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify...

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Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, 216,000. 2. What was the total product cost for last year? 3. What was the total period cost for last year? 4. If 30,000 units were produced last year, what was the unit product cost?
Problem 12 Compute the Cost of Goods Sold for 2020 of Pillows Company considering the followinginformation:  Raw materials purchased was P2,500,000 with freight-in of P120,000 Purchase returns was P50,000 and purchase discount is 60% of purchase returns Raw materials beginning was P460,000 Raw materials end was P40,000 more than the beginning inventory Direct labor is P1,000,000 Factory overhead is 50% of direct labor Total goods placed in process is 150% of manufacturing cost WIP, end is 75% of WIP, beg Finished goods beginning balance is lesser by P100,000 than the ending balance whichwas P600,000
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