ACCT346 Variable and Full Costing

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ACCT346 Variable and Full Costing
Discuss the difference between variable costing and full cost…

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ACCT346 Variable and Full Costing

ACCT346 Variable and Full Costing

Discussions Week 3 All Students Post 46 Pages

Discuss the difference between variable costing and full costing. Why would income computed under full costing exceed income computed under variable costing if production exceeds sales?… When would a company choose to use a full costing income statement and when would it use a variable costing income statement? What are the ramifications of each?

Why doesn’t GAAP allow variable costing financial statements for external use?

Problem #2 emphasizing the difference between full costing and variable costing:
A company has fixed manufacturing costs of $2,000,000 and produces 600,000 units and sells 500,000 units. There is no beginning inventory. (Of course the ending inventory is the difference of 600,000-500,000 or 100,000 units.)
What differences, using numbers from this problem, not general concepts, would we see in the variable and full costing statements? WHY?(Be sure to review the concepts in the chapter…