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Balene Company sells its product for $95 per unit. Variable manufacturing cost per unit is $56 while fixed manufacturing overhead totals $360,000. Variable selling and administrative expenses are $15 per unit sold and fixed and selling and administrative expenses total $280,000. In year 1, 45,000 units were produced and sold (hence, there was no inventory at the year's end). In year 2, production. increased to 48,000 units but the volume of sales remained unchanged. Variable costs per unit and total fixed costs also remained unchanged. Compute the income change from Year 1 to Year 2 both variable costing and for absorption costing. An increase of $72,000 for variable costing, and an increase of $72,000 for absorption costing An increase of $72,000 for variable costing, and an increase of $22,500 for absorption costing An increase of $0 for variable costing, and an increase of $0 for absorption costing An increase of $0 for variable costing, and an increase of $22,500 for absorption costing

Balene Company sells its product for $95 per unit. Variable manufacturing cost per unit is $56 while fixed manufacturing overhead totals $360,000. Variable selling and administrative expenses are $15 per unit sold and fixed and selling and administrative expenses total $280,000. In year 1, 45,000 units were produced and sold (hence, there was no inventory at the year's end). In year 2, production. increased to 48,000 units but the volume of sales remained unchanged. Variable costs per unit and total fixed costs also remained unchanged. Compute the income change from Year 1 to Year 2 both variable costing and for absorption costing. An increase of $72,000 for variable costing, and an increase of $72,000 for absorption costing An increase of $72,000 for variable costing, and an increase of $22,500 for absorption costing An increase of $0 for variable costing, and an increase of $0 for absorption costing An increase of $0 for variable costing, and an increase of $22,500 for absorption costing

FINANCIAL ACCOUNTING
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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Balene Company sells its product for $95 per unit. Variable manufacturing cost per unit is $56 while fixed manufacturing overhead totals $360,000. Variable selling and administrative expenses are $15 per unit sold and fixed and selling and administrative expenses total $280,000. In year 1, 45,000 units were produced and sold (hence, there was no inventory at the year's end). In year 2, production increased to 48,000 units but the volume of sales remained unchanged. Variable costs per unit and total fixed costs also remained unchanged. Compute the income change from Year 1 to Year 2 both variable costing and for absorption costing. An increase of $72,000 for variable costing, and an increase of $72,000 for absorption costing O An increase of $72,000 for variable costing, and an increase of $22,500 for absorption costing An increase of $0 for variable costing, and an increase of $0 for absorption costing An increase of $0 for variable costing, and an increase of $22,500 for absorption costing
Transcribed Image Text:Balene Company sells its product for $95 per unit. Variable manufacturing cost per unit is $56 while fixed manufacturing overhead totals $360,000. Variable selling and administrative expenses are $15 per unit sold and fixed and selling and administrative expenses total $280,000. In year 1, 45,000 units were produced and sold (hence, there was no inventory at the year's end). In year 2, production increased to 48,000 units but the volume of sales remained unchanged. Variable costs per unit and total fixed costs also remained unchanged. Compute the income change from Year 1 to Year 2 both variable costing and for absorption costing. An increase of $72,000 for variable costing, and an increase of $72,000 for absorption costing O An increase of $72,000 for variable costing, and an increase of $22,500 for absorption costing An increase of $0 for variable costing, and an increase of $0 for absorption costing An increase of $0 for variable costing, and an increase of $22,500 for absorption costing
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