Please also provide a brief explanation, thank you Snowball Ltd. manufactures a specialized...
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Please also provide a brief explanation, thank you
Snowball Ltd. manufactures a specialized snowboard made for advanced snowboarders. Snowball Ltd. started 20x2 with an inventory of 480 snowboards. During the year, it produced 1,800 boards and sold 1,990 for $750 each. Fixed production costs were $560,000 and variable production costs were $335 per unit. Fixed advertising, marketing and other general and administrative expenses were $224,000 and variable shipping costs were $15 per board. Assume that the cost of each unit in beginning inventory is equal to 20x2 inventory cost.
a. Provide an income statement assuming Snowball Ltd. uses variable costing.
b. Provide an income statement assuming Snowball ltd. uses absorption costing. Snowball Ltd. uses a denominator level of 2,000 units. Production-volume variances are written off to cost of goods sold.
Please also provide a brief explanation, thank you
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