A reason why absorption costing income statements are sometimes difficult to interpret is that: Multiple Choice they omit variable expenses entirely in computing net operating income. they shift portions of fixed manufacturing overhead from period to period according to changing levels of inventories. they include all fixed manufacturing overhead on the income statement each year as a period cost. they ignore inventory levels in determining cost of goods sold.

Evan company reports net income of $232,000 each year and declares an annual cash dividend of $100,000. the company holds net assets of $2,130,000 on january 1, 2017. on that date, shalina purchases 40 percent of evan's outstanding common stock for $1,066,000, which gives it the ability to significantly influence evan. at the purchase date, the excess of shalina’s cost over its proportionate share of evan’s book value was assigned to goodwill. on december 31, 2019, what is the investment in evan company balance (equity method) in shalina’s financial records?