Question

Variable Costing—Sales Exceed Production The beginning inventory is 14,200 units. All of the units that were...

Variable Costing—Sales Exceed Production

The beginning inventory is 14,200 units. All of the units that were manufactured during the period and 14,200 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $35 per unit, and variable manufacturing costs are $84 per unit.

a. Determine whether variable costing income from operations is less than or greater than absorption costing income from operations.

b. Determine the difference in variable costing and absorption costing income from operations.
$

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SOLUTION

1.

Beginning Inventory Units 14,200
Fixed Cost per unit $35
Total Beginning Inventory costs 497,000

Now in Variable costing, these opening fixed costs would have been charged during previous year whereas in Absorption costing these Fixed costs would be part of this year.

Thus as per Variable costing total fixed costs would be less as compared to previous year since all the units produced in this period are sold.  

2. Difference in variable costing and absorption costing income from operations

= $497,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
At EOM Inc., the beginning inventory is 20,000 units. All of the units manufactured during the...
At EOM Inc., the beginning inventory is 20,000 units. All of the units manufactured during the period and 16,000 units of the beginning inventory were sold. The beginning inventory fixed costs are $50 per unit, and variable costs are $300 per unit. a. Determine whether variable costing income from operations is less than or greater than absorption costing income from operations. b. Determine the difference in variable costing and absorption income from operations. $
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $56 per unit, and variable manufacturing costs are...
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $56 per unit, and variable manufacturing costs are $168 per unit. Production was 110,000 units, while sales were 103,400 units. a. Determine whether variable costing income from operations is less than or greater than absorption costing income from operations. Variable costing income from operations is less than absorption costing. b. Determine the difference in variable costing and absorption costing income from operations. $fill in the blank
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $39 per unit, and variable manufacturing costs are...
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $39 per unit, and variable manufacturing costs are $117 per unit. Production was 112,000 units, while sales were 105,280 units. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. b. Determine the difference in variable costing and absorption costing operating income. $
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $45 per unit, and variable manufacturing costs are...
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $45 per unit, and variable manufacturing costs are $135 per unit. Production was 105,000 units, while sales were 99,750 units. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. Variable costing operating income is less than absorption costing. b. Determine the difference in variable costing and absorption costing operating income.
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 4,200 units and sold 3,600 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $1,584,000 Variable cost of goods sold: Variable cost of goods manufactured $886,200 Inventory, December 31 (126,600) Total variable cost of goods sold 759,600 Manufacturing...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 1,700 units and sold 1,500 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $465,000 Variable cost of goods sold: Variable cost of goods manufactured $253,300 Inventory, December 31 (29,800) Total variable cost of goods sold 223,500 Manufacturing...
Fixed manufacturing costs are $42 per unit, and variable manufacturing costs are $126 per unit. Production...
Fixed manufacturing costs are $42 per unit, and variable manufacturing costs are $126 per unit. Production was 89,000 units, while sales were 83,660 units. b. Determine the difference in variable costing and absorption costing operating income. $
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, 4,800 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $33.80 Direct labor 20.30 Fixed factory overhead 6.90 Variable factory overhead 6.10 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing $ Variable costing $
High Company in 2019 produced 10,000 units and sold 9,000 units. There were no beginning inventory...
High Company in 2019 produced 10,000 units and sold 9,000 units. There were no beginning inventory for 2019. The difference in net income between absorption costing and variable costing is $10,000. How much is the company's fixed manufacturing overhead cost?
Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of...
Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold. Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 Sales $1,125,000 Cost of goods sold:   Cost of goods manufactured $800,000   Ending inventory (200,000)     Total cost of goods sold (600,000) Gross...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT