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    Finding Operating Income

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    CMA problem. Use this information to answer problems #22 and #23.

    Osawa, Inc. planned and actually manufactured 200,000 units of its single product in
    2001, its first year in operation. Variable manufacturing costs were $20 per unit
    produced. Variable operating costs were $10 per unit sold. Planned and actual
    fixed manufacturing costs were $600,000. Planned and actual operating costs
    totaled $400,000 in 2001. Osawa sold 120,000 units of product in 2001 at a
    selling price of $40 per unit.

    Osawa's 2001 operating income using absorption costing is:
    a. $440,000
    b. $200,000
    c. $600,000
    d. $840,000
    e. None of these

    Osawa's 2001 operating income using variable costing is:
    a. $800,000
    b. $440,000
    c. $200,000
    d. $600,000
    e. None of these

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    Solution Preview

    Hi There,
    <br>Please see the attached Excel spreadsheet.
    <br>Here are a few links for some extra information regarding ...

    Solution Summary

    This problem reveals how to find operating income