121-2018SP-R . Prin of Managerial Accounting (Jan to May) CengageNoWv2 1 Online

Question

121-2018SP-R . Prin of Managerial Accounting (Jan to May) CengageNoWv2 1 Online teaching and learning resource from Cengage Learning Show Me How a Cakulator eBook Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are If an amount is zero, enter "0. Do not round interim calculations. Round final answer to nearest whole dollar $88 per unit, and fixed manufacturing costs are $113,400. Sales are estimated to be 5,700 units. a. How much would absorption costing ncome from operations difer between a plan to produce 5, 700 units and a plan to produce 8,100 units? differ between a plan to produce 5,700 units and a plan to produce 8,100 units? b. How much would variable costing income from operations differ between the two production plans?

Explanation / Answer

A

Answer:$33,600

Working notes for the above answer:

Fixed manufacturing cost=$113,400

Per unit fixed cost if 8100 unit produce

=113400/8100

=$14 per unit

Change in units

=8100-5700

=2400

Difference in income as per absorption cost from 5700 units to 8100 units

=2400*14

=$33600

Difference in income as per absorption cost from 5700 units to 8100 units= $33,600

__________________________________________________________

b

Answer:0

Working notes for the above answer:

In the variable costing there will not any change weather company produce 5700 units or 8100 units

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