The Following Data Are Available for Brennan Soft Toys Company

question 197

Essay

The following data are available for Brennan Soft Toys Company for the year ended September 30,2015.
$\begin{array}{lr}\text { Sales: }&24,000 \text { units at } \$ 50 \text { each }\\\text { Expected and actual production: }&30,000 \text { units }\\\text { Manufacturing costs incurred: }\\\text { Variable: } & \$ 525,000 \\\text { Fixed: } & \$ 372,000 \\\text { Nonmanufacturing costs incurred: } & \\\text { Variable: } & \$ 144,800 \\\text { Fixed: } & \$ 77,400 \\\text { Beginning inventories: } & \text { none }\end{array}$ 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:

Coffee Breaks

are short breaks during work hours allowing employees to rest and refresh, often with coffee or tea.

Reinforcement Theory

A psychological theory suggesting that behavior can be shaped by controlling the consequences of that behavior, emphasizing the use of reinforcement, punishment, or extinction to influence workplace behavior.

Expectancy Theory

A psychological theory that postulates an individual's motivation is an outcome of their expectations about their ability to achieve desired performance levels and the perceived rewards for doing so.

Maslow's Theory

Maslow's Theory, or Maslow's Hierarchy of Needs, is a psychological concept that arranges human needs into a hierarchy, suggesting that people are motivated to fulfill basic needs before moving on to other, more advanced needs.