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Valentine produces jet bridges for many domestic and international airports. Cost information for Valentine's jet bridges is as follows (Click the icon to view the cost information) Additional information for the first three quarters of 2020 for Valentine are shown below (Click the icon to view the additional information for the first three quarters) Valentine's controller, Norm, wishes to analyze the difference in the income statements between throughout costing, absorption costing, and variable costing for the first 3 quarters of 2020. Assume no beginning inventory Read the Data table - X $ 5,900 3,300 $ $ 6,600 Variable costs per jet bridge: Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling $ 1,500 1,300 $ $ 867,750 allocated based on budgeted production $ 560,000 Print Done 3 $ tid $ 5,900 3,300 6,600 14 $ le 1,500 Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling General and administrative $ $ lar TA 1,300 ne $ 867,750 allocated based on budgeted production $ 560,000 ta $ 785,000 va in Print Done 1st Quarter 2nd Quarter 3rd Quarter 63 67 65 63 67 65 60 60 57 Budgeted production Actual production Sales Sales price: $40,000 per jet bridge Fixed selling costs by quarter Fixed G&A costs by quarter 190,000 190,000 180,000 220,000 345,000 220,000 Print Done Requirement 4. Explain the difference in the net income under each costing method The a costing method aborbs the most costs into Inventory, followed by the costing method, with the costing method absorbing the least amount of costs into inventory. As a result, based on our scenario here where ending inventory is between the three quarters, the costing method results in the highest amount of net incomo, followed by the costing method, with the costing method resulting in the lowest amount of net income for each of the three quarters. Requirement 5. Based on the information provided, which costing method do you believe Valentine is currently using to calculate the bonus for the production manager? Why? Based on the information provided, Valentine is likely using the costing method to calculate the bonus for the production manager because inventory is each quarter with no credible reason. Using costing will increase net income by the amount of manager? Why? Based on the information provided, Valentine is likely using the W costing method to calculate the bonus for the production manager because inventory is Y each quarter with no credible reason. Using costing will increase not income by the amount of costs absorbed into inventory, thus providing the managers with a higher bonus. Requirement 6. If Q4 sales were 67 and 04 actual and budgeted production was 52, what difference would you expect in Q4 income between absorption costing and variable costing? Why? 104 sales are 67 and 04 production is 52, ending inventory would by units At a fixed manufacturing cost per unit of we would expect net income calculated with absorption costing to be than variable costing Requirement 4. Explain the difference in the netome under each casting method conting mod bortis the most inventory followed by the costing method with the conting method torting the amount of costs in invertory Assut, based on our si There where ending inventory between the three quarters, the costing method the Night amount of theme, followed by the costing method, with the cosing method multing in a lowest amount of income for each of the three que Requirements. Based on the information provided withing method do you believe in helsing to the bonus for the production manage? Why? Based on the information provided, Velai is by using the costing method to call the bonus for the reduction manager because inventory nach werden costing will incremenome by the amount of Worted to inventory, the providing a maswalions Requirement les were 87 and 4 bed production was where would you expect in oricing and we coin? Why? Tout and production is nang word DY Ata federating colper we were income than var CH) www.wany domestead wtoral spon Cost information to Vejetbridge * for the fore we wow door) between groot toedre teonton cering, and variabile conting lurte frullates 2010. hamaroneberg to what we mocowany we to protected to be recepten maraw? Why? be provider Valentine produces jet bridges for many domestic and international airports. Cost information for Valentine's jet bridges is as follows (Click the icon to view the cost information) Additional information for the first three quarters of 2020 for Valentine are shown below (Click the icon to view the additional information for the first three quarters) Valentine's controller, Norm, wishes to analyze the difference in the income statements between throughout costing, absorption costing, and variable costing for the first 3 quarters of 2020. Assume no beginning inventory Read the Data table - X $ 5,900 3,300 $ $ 6,600 Variable costs per jet bridge: Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling $ 1,500 1,300 $ $ 867,750 allocated based on budgeted production $ 560,000 Print Done 3 $ tid $ 5,900 3,300 6,600 14 $ le 1,500 Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling General and administrative $ $ lar TA 1,300 ne $ 867,750 allocated based on budgeted production $ 560,000 ta $ 785,000 va in Print Done 1st Quarter 2nd Quarter 3rd Quarter 63 67 65 63 67 65 60 60 57 Budgeted production Actual production Sales Sales price: $40,000 per jet bridge Fixed selling costs by quarter Fixed G&A costs by quarter 190,000 190,000 180,000 220,000 345,000 220,000 Print Done Requirement 4. Explain the difference in the net income under each costing method The a costing method aborbs the most costs into Inventory, followed by the costing method, with the costing method absorbing the least amount of costs into inventory. As a result, based on our scenario here where ending inventory is between the three quarters, the costing method results in the highest amount of net incomo, followed by the costing method, with the costing method resulting in the lowest amount of net income for each of the three quarters. Requirement 5. Based on the information provided, which costing method do you believe Valentine is currently using to calculate the bonus for the production manager? Why? Based on the information provided, Valentine is likely using the costing method to calculate the bonus for the production manager because inventory is each quarter with no credible reason. Using costing will increase net income by the amount of manager? Why? Based on the information provided, Valentine is likely using the W costing method to calculate the bonus for the production manager because inventory is Y each quarter with no credible reason. Using costing will increase not income by the amount of costs absorbed into inventory, thus providing the managers with a higher bonus. Requirement 6. If Q4 sales were 67 and 04 actual and budgeted production was 52, what difference would you expect in Q4 income between absorption costing and variable costing? Why? 104 sales are 67 and 04 production is 52, ending inventory would by units At a fixed manufacturing cost per unit of we would expect net income calculated with absorption costing to be than variable costing Requirement 4. Explain the difference in the netome under each casting method conting mod bortis the most inventory followed by the costing method with the conting method torting the amount of costs in invertory Assut, based on our si There where ending inventory between the three quarters, the costing method the Night amount of theme, followed by the costing method, with the cosing method multing in a lowest amount of income for each of the three que Requirements. Based on the information provided withing method do you believe in helsing to the bonus for the production manage? Why? Based on the information provided, Velai is by using the costing method to call the bonus for the reduction manager because inventory nach werden costing will incremenome by the amount of Worted to inventory, the providing a maswalions Requirement les were 87 and 4 bed production was where would you expect in oricing and we coin? Why? Tout and production is nang word DY Ata federating colper we were income than var CH) www.wany domestead wtoral spon Cost information to Vejetbridge * for the fore we wow door) between groot toedre teonton cering, and variabile conting lurte frullates 2010. hamaroneberg to what we mocowany we to protected to be recepten maraw? Why? be provider

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