The Following Data Are Available for Cavaliers Company for the Year

question 3

Essay

The following data are available for Cavaliers Company for the year:
Sales: 38,000 units at $\$ 50$ each
Expected and actualproduction: $\quad \mathbf { 4 0 , 0 0 0 }$ units
Manufacturingcosts incurred:
Variable: $\quad \$ 1,400,000$
Fixed: $\$ 228,000$
Nonmanufacturingcosts incurred:
Variable: $\quad \$ 76 , 0 0 0$
Fixed: $\$ 135,000$
Beginninginventories: none Required
a. Determine operating income using the variable- costing approach.
b. Determine operating income using the absorption- costing approach.
c. Explain why operating income is not the same under the two approaches.

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Definitions:

Exoskeleton

A rigid external covering for the body in some invertebrate animals, especially arthropods, providing both support and protection.

Echinoderm

A phylum of marine animals known for their radial symmetry and unique water vascular system, including starfish and sea urchins.

Evolutionary Relationships

The connections among different species or organisms that can be traced back to a common ancestor, explored through genetics, physical characteristics, and other biological data.

Amniotes

Terrestrial vertebrates: reptiles, birds, and mammals; animals whose embryos are enclosed by an amnion.