On December 30, a Fire Destroyed Most of the Accounting

question 63

Essay

On December 30, a fire destroyed most of the accounting records of the Alcorn Division, a small one-product manufacturing division that uses standard costs and flexible budgets. All variances are written off as additions to (or deductions from) income; none are pro-rated to inventories. You have the task of reconstructing the records for the year. The general manager informs you that the accountant has been experimenting with both absorption costing and variable costing.
The following information is available for the current year:
Required:
Compute the following items (ignore income tax effects).

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Definitions:

Absolute Advantage

The ability of an individual or economy to produce a good or service more efficiently than competitors using the same amount of resources.

Cars

Motor vehicles with four wheels designed primarily for passenger transportation and commonly powered by internal combustion engines.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors, using fewer resources.

Lumber

Lumber that has been manufactured into planks and beams, marking a step in the journey of producing wood products.