The following data are available for Ruggles Company for the year ended September 30, 2011.
Manufacturing costs incurred:
Nonmanufacturing costs incurred:
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.

Question

The following data are available for Ruggles Company for the year ended September 30, 2011.
  Manufacturing costs incurred:
  Nonmanufacturing costs incurred:
  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.

Quizplus · Accepted Answer

The Answer of The following data are available for Ruggles Company for the year ended September 30, 2011.
  Manufacturing costs incurred:
  Nonmanufacturing costs incurred:
  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.

The Following Data Are Available for Ruggles Company for the Year