Ruggles Company Has Provided the Following Data for the Year

question 69

Essay

Ruggles Company has provided the following data for the year ended 30 September 2018.
$\begin{array}{lr}\text { Sales: } & 24000 \text { units at } \$ 50 \text { each } \\\text { Expected and actual production: } & 30000 \text { units } \\\text { Manufacturing costs incurred: } &\\\text { Variable: } & \$ 525000 \\\text { Fixed: } & \$ 372000\\\text { Nonmanufacturing costs incurred: }\\\text { Variable: } & \$ 144800 \\\text { Fixed: } & \$ 77400 \\\text { Beginning inventories: } & \text { none }\end{array}$
Required:
a.Determine operating profit using the variable-costing approach.
b.Determine operating profit using the absorption-costing approach.
c.Explain why operating profit is not the same under the two approaches.
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Definitions:

Unconditional Affection

An affectionate feeling or action shown towards someone regardless of their actions or faults.

Conditional Affection

Affection or emotional support shown towards someone that is dependent on specific conditions or behaviors they exhibit.

Reaction Formation

A defense mechanism where an unacceptable impulse is transformed into its opposite, often in behavior and attitudes.

Defense Mechanism

A psychological strategy unconsciously used to protect a person from anxiety arising from unacceptable thoughts or feelings.