Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


a Variable-costing profit statements 2006 2007



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a
Variable-costing profit statements

2006 2007
Together
Profit (and contribution margin)
€300,000
€300,000
€600,000 Fixed costs

Manufacturing costs
€280,000
Marketing and administrative cost 40,000 320,000 320,000 640,000 Operating profit
€(20,000)
€(20,000
)
€(40,000)


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
b
Absorption profit statements The ambiguity about the 10,000- or unit denominator level is intentional. IF YOU WISH, THE AMBIGUITY MAYBE AVOIDED BY GIVING THE STUDENTS A SPECIFIC DENOMINATOR LEVEL IN ADVANCE. Alternative 1. Use 20,000 units as a denominator fixed manufacturing overhead per unit is
€280,000 ÷ 20,000 = €14.

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