Biology Forums - Study Force

The following data are available for Ruggles Company for the year ended September 30, 2016.

Sales: 24,000 units at $50 each   $ 1,200,000
Expected and actual production:   30,000 units
Manufacturing costs incurred:
   Variable:   $525,000
   Fixed:   $372,000
Nonmanufacturing costs incurred:
   Variable:   $144,800
   Fixed:   $77,400
Beginning inventories:    none

Required:
a.   Determine operating income using the variable costing approach.
b.   Determine operating income using the absorption costing approach.
c.   Explain why the income was different each year using the two methods. Show computations.

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