Question

Which of the following income statements is required for internal reporting purposes? Please Explain. A. Absorption...

Which of the following income statements is required for internal reporting purposes? Please Explain.

A. Absorption Costing

B. Variable Costing

C. Throughput Costing

D. None of the other answers are correct
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution :

Option B (Variable Costing ) is the correct answer.

Variable Costing Income statement is used for the purpose of internal reporting. In variable costing only product costs shall be included and whereas period costs are excluded and hence it is taken for internal reporting purposes.

Conclusion : From the above we can understand that OPTION B satisfies the given requirement in the question whereas remaining Options A,C,D, do not satisfy the given requirement in question.

Thankyou !!!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Grimstad Company uses FIFO for internal reporting purposes and LIFO for financial reporting and income tax...
Grimstad Company uses FIFO for internal reporting purposes and LIFO for financial reporting and income tax purposes. At the end of 2016, the following information was obtained from the inventory records: 2015 2016 Ending inventory, FIFO 100,000 140,000 Ending inventory, LIFO 80,000 115,000 Required: 1. Prepare the necessary adjusting journal entry assuming that Grimstad converts the accounts to LIFO at the end of 2016. 2. Indicate how Grimstad would disclose the inventory value in its notes to the financial statements...
which of the following is not a disadvantage of using variable costing as opposed to absorption...
which of the following is not a disadvantage of using variable costing as opposed to absorption costing A) Variable accounting records do not conform to GAAP so two sets of records must be maintained of the company is required to file their statements publicly B) owners equity tends to be understated C) accounting records are more costly to maintain D) only variable costs are assigned to inventory making poor management decisions E) none of the above are disadvantages
Which of the following will always give the highest product cost per unit? A. Variable Costing...
Which of the following will always give the highest product cost per unit? A. Variable Costing B. The highest product cost per unit (Absorption, Variable, or Throughput) will depend on the number of units budgeted. C. Throughput Costing D. Absorption Costing
QUESTION 1 Total production overhead is treated as a product cost when using A. Absorption or...
QUESTION 1 Total production overhead is treated as a product cost when using A. Absorption or "Full" costing B. Throughput costing C. Throughput costing and absorption costing D. Variable costing 1 points QUESTION 2 Some companies use throughput costing for internal purposes because A. They believe only direct materials costs are truly variable in the short run B. They believe direct labor costs are fixed in the short run C. They believe all overhead costs are fixed in the short...
Bluestone llc uses variable costing and absorption costing. In the variable costing income statement which of...
Bluestone llc uses variable costing and absorption costing. In the variable costing income statement which of the following is a period cost? a) direct materials b) direct labor c) both a and b d) neither a nor b
31.    Black Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes....
31.    Black Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2020 was $280,000. The balance in the same account at the end of 2021 is $420,000. Black’s Cost of Goods Sold account has a balance of $2,100,000 from sales transactions recorded during the year. What amount should Black report as Cost of Goods Sold in the 2021 income statement? a.      $1,960,000. b.      $2,100,000. c.      $2,240,000. d.      $2,520,000....
Sierra Company incurs the following costs to produce and sell a single product. Variable costs per...
Sierra Company incurs the following costs to produce and sell a single product. Variable costs per unit: Direct materials $ 11 Direct labor $ 9 Variable manufacturing overhead $ 4 Variable selling and administrative expenses $ 5 Fixed costs per year: Fixed manufacturing overhead $ 88,500 Fixed selling and administrative expenses $ 300,000    During the last year, 29,500 units were produced and 25,000 units were sold. The Finished Goods inventory account at the end of the year shows a...
Which of the following statements is false regarding absorption costing? Multiple Choice It assigns all manufacturing...
Which of the following statements is false regarding absorption costing? Multiple Choice It assigns all manufacturing costs, both fixed and variable, to units of product. It is typically used for external financial reporting. It relies on a predetermined overhead rate to apply direct material cost to units of product. It treats all nonmanufacturing costs as period costs.
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (17,000 units) $2,210,000 Production costs (22,000 units): Direct materials $1,058,200 Direct labor 508,200 Variable factory overhead 253,000 Fixed factory overhead 169,400 1,988,800 Selling and administrative expenses: Variable selling and administrative expenses $308,300 Fixed selling and administrative expenses 119,300 427,600...
Give a numerical example for Variable Costing Contribution Format Income Statement that is used for the...
Give a numerical example for Variable Costing Contribution Format Income Statement that is used for the internal decision-making and compare with the traditional income statement prepared by absorption costing that is used for the external reporting. Prepare the two income statements assuming the following 1- There is no inventory. 2- There is beginning inventory. 3- There is end of period inventory 4- Explain and comment on the reasons for differences in the results
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT