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:

Regular Field

A standard data entry area in a form or database, used to input or display single pieces of information.

Query Design Grid

A graphical tool within database software that lets users construct queries by laying out fields and criteria in a grid format.

Calculations

Mathematical operations performed to determine a result, widely used in various fields such as mathematics, finance, and data analysis.

Lookup List

A feature in database and spreadsheet software that provides a predefined list of values for a field, helping to ensure data consistency and accuracy.