The annual data that follows pertain to Goggles 4 U, a manufacturer of swimming goggles...
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The annual data that follows pertain to Goggles 4 U, a manufacturer of swimming goggles (the company had no beginning inventory) Click the icon to view the data.) Read the requirements Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Goggles 4 U for the year. Begin with the conventional (absorption costing) income statement Goggles 4U Income Statement (Absorption Costing) For the Year Ended December 31 Less Data table Requirements Less: Operating expenses Sales price..... 48 Variable manufacturing expense per unit ... $ 20 Sales commission expense per unit $ 8 Fixed manufacturing overhead $ 2,760,000 Fixed operating expenses. $ 240,000 Number of goggles produced 230,000 Number of goggles sold 216,000 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Goggles 4 U for the year. 2. Which statement shows the higher operating income? Why? 3. The company marketing vice president believes a new sales promotion that costs $135,000 would increase sales to 230,000 goggles. Should the company go ahead with the promotion? Give your reason. Print Done Print Done
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