In early August, Terry Silver, the new marketing vice president of Landau Company, was studying the July income statement. Silver found the statement puzzling: July's sales had increased significantly over June's, yet income was lower in July than in June. Silver was certain that margins on Landau's products had not narrowed in July and therefore felt that there must be some mistake in the July statement.
1. Critique the various pros and cons of the variable costing proposal that were presented in the meeting. What arguments would you add?
2. Should Landau adopt variable costing for its monthly income statements?
This question was answered on: Jul 11, 2017
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