Moore Company prepared the following absorption-costing income statement for the year ended May 31, 2011.
Additional information follows:
Selling and administrative expenses include $1.50 of variable cost per unit sold. There was no beginning inventory, and 8,750 units were produced. Variable manufacturing costs were $11 per unit. Actual fixed costs were equal to budgeted fixed costs.
Required:
Prepare a variable-costing income statement for the same period.
Definitions:
Unsystematic Risk
The risk associated with a specific company or industry that can be mitigated through diversification.
Systematic Risk
The risk inherent to the entire market or market segment, also known as market risk or un-diversifiable risk.
Risk Premium
The additional return required by investors for taking a higher level of risk, compared to a safer investment.
Recession
A significant decline in economic activity spread across the economy, lasting more than a few months, visible in GDP, real income, employment, industrial production, and wholesale-retail sales.
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