Question
The Pacific Company manufactures a single product. its cost structure, which has remained constant for the...
The Pacific Company manufactures a single product. its cost structure, which has remained constant for the last 3 years, is as follows:
| Variable cost per unit | |
| Production | $43 |
| Selling and Administrative | $15 |
| Fixed Costs in Total | |
| Production | $145,000 |
| Selling and Administrative | $95,000 |
5,800 units were produced and 5,000 units were sold during 2019. There were no beginning inventories.
Which of the following would best describe the relationship between the net income for 2019 under variable costing as opposed to under absorption costing?
$8,800 more than under absorption costing
none of the others is correct
$20,000 more than under absorption costing
$8,800 less than under absorption costing.
$20,000 less than under absorption costing
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Answer #1
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