The Dean Corporation Produces and Sells a Single Product

question 107

Essay

The Dean Corporation produces and sells a single product.The following data refer to the year just completed: Assume that direct labor is a variable cost.
Required:
a.Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
b.Prepare an income statement for the year using absorption costing.
c.Prepare a contribution format income statement for the year using variable costing.
d.Reconcile the absorption costing and variable costing net operating income figures in (b)and (c)above.

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Definitions:

External Attribution

An explanation for behavior focusing on the surrounding situation.

External Attribution

The process of attributing the cause of one's own or others' behavior to external factors or the situation rather than to internal characteristics.

Explanation

The process of making something clear or understandable by describing the relevant facts or ideas.

Surrounding Situation

The environmental and contextual factors that are currently present around an individual and can influence their behavior or actions.