2. Change all of the numbers in the data area of your worksheet so that it looks like this:
A B C |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 |
|
3.
Make a note of the absorption costing net operating income (loss) in Year 2.
At the end of Year 1, the company’s board of directors set a target for Year 2 of net operating income of $150,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 4,600 units.
(a) Would this change result in a bonus being paid to the CEO?
Yes
No
(b) What is the net operating income (loss) in Year 2 under absorption costing?
Answer (a) Yes the CEO will be having bonus after changing data.
Answer (b) Net operating profit in Year 2 will be $ 93200
and after canging data profit will increase to $ 155600
Get Answers For Free
Most questions answered within 1 hours.