Query description
Pacific Sports activities, Inc.
makes surf boards. Following are stock and price figures relative to the
12 months ended June 30 2013:
Starting stock 1,000 models
Produced 10,000 models
Offered eight,000
models
Gross sales value per unit $500
Variable manufacturing
prices per unit $200
Fastened manufacturing prices
unit $100
SG&A Bills $1,000,000
Required:
Compute the
working revenue utilizing the absorption methodology.
Compute the
working revenue utilizing the variable costing methodology.
Reconcile the
distinction.
Why would possibly an organization
select to make use of variable costing for administration functions?