Income Statement For Bear Bear Ltd Assignment Help
Bear Bear Limited manufactures toys for kids and began operations in 2016. For 2016, Bear Bear budgeted to produce and sell 2,000 units.The company had no price, spending, or efficiency variances and writes off production- volume variance to cost of goods sold. Actual data for 2016 are given as follows:
|Manufacturing Cost Per Unit Produced|
|Direct manufacturing labor||$8|
|Marketing cost per unit sold||$10|
a.Prepare a 2016 income statement for Bear Bear Limited using variable costing.
b.Prepare a 2016 income statement for Bear Bear Limited using absorption costing.
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c.Explain the differences in operating incomes obtained in requirements (a) and (b).
d.Bear Bear’s management is considering implementing a bonus for the supervisors based on gross margin under absorption costing. What incentives will this bonus plan create for the supervisors?
What modifications could Bear Bear’s management make to improve such a plan? Explain briefly.
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