The level of inventory of a manufactured product has increased by 7,675 units during a period. The following data are also available: VariableFixedUnit manufacturing costs of the period$11.00 $8.00 Unit operating expenses of the period4.00 2.00 The effect on operating income if absorption costing is used rather than variable costing would be aa.$61,400 decreaseb.$61,400 increasec.$76,750 decreased.$76,750 increase

Name: The level of inventory of a manufactured product has increased by 7,67
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Description: The level of inventory of a manufactured product has increased by 7,675 units during a period. The following data are also available: VariableFixedUnit manufacturing costs of the period$11.00 $8.00 Unit operating expenses of the period4.00 2.00 The e

The operating income under absorption costing will be lower by the increase in units of inventory…

Answered: absorption costing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The level of inventory of a manufactured product has increased by 7,675 units during a period. The following data are also available:

Variable Fixed

Unit manufacturing costs of the period $11.00 $8.00

Unit operating expenses of the period 4.00 2.00

The effect on operating income if absorption costing is used rather than variable costing would be a

a.$61,400 decrease

b.$61,400 increase

c.$76,750 decrease

d.$76,750 increase

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