SamTech Company Has Two Identical Divisions, East and West

question 172

Essay

SamTech Company has two identical divisions, East and West.Their sales, production volume, and fixed manufacturing costs have been the same for the last five years.The amounts for each division were as follows:
East Division uses absorption costing and West Division uses variable costing.Both use FIFO inventory methods.Variable manufacturing costs are $5 per unit.Selling and administrative expenses were identical for each division.There were no inventories at the beginning of Year 1.Required:
Which division reports the highest income each year? Explain.

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Definitions:

Flexibility

Flexibility in the workplace refers to the ability to adapt to changes and new demands, whether in terms of work arrangements, tasks, or thinking, fostering innovation and resilience.

Results-based Approaches

Strategies focused on achieving specific outcomes or goals, often assessed through measurable performance indicators.

Employee's Control

Refers to the degree of autonomy and influence that an employee has over their work tasks and environment.

Critical-Incident Technique

A method used in performance appraisal and training that focuses on identifying and analyzing specific, significant events (critical incidents) where the employee demonstrated behaviors that led to particularly successful or unsuccessful outcomes.