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UHF Antennas, Inc._Absorption and Variable costing

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Question;UHF;Antennas, Inc., produces and sells a unique television antenna. The company has;just opened a new plant to manufacture the antenna, and the following cost and;revenue data have been reported for the first month of the new plant's;operation:Management;is anxious to see how profitable the new antenna will be and has asked that an;income statement be prepared for the month. Assume that direct labor is a;variable cost.;Required;a. Assuming that the;company uses absorption costing, compute the unit product cost and prepare an;income statement.;b. Assuming that the;company uses variable costing, compute the unit product cost and prepare an;income statement.;c. Explain the reason;for any difference in the ending inventories under the two costing methods and;the impact of this difference on reported net operating income.

 

Paper#39699 | Written in 18-Jul-2015

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