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Whitepunk [10]
3 years ago
13

Landow Company uses variable costing for internal purposes and wants to restate income to that of absorption costing for externa

l reporting purposes. Landow's income under variable costing is $630,000. Fixed production cost in ending inventory is $120,000 and $85,000 in beginning inventory. What is Landow's income under absorption costing?
Business
1 answer:
zubka84 [21]3 years ago
4 0

Answer:

$635,000

Explanation:

The computation of the net income under absorption costing is shown below:

= Income under variable costing + fixed production cost in ending inventory - beginning inventory

= $630,000 + $120,000 - $85,000

= $635,000

By adding the fixed cost and deduct the beginning inventory to the variable costing income we can easily calculate the absorption costing income

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