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Easylang Corp. produces a single product. The following cost structure applied to their first year of operations, 2000: (refer to image) Assume that during 2000 Easylang Corp. manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Easylang Corp.’s income be if it uses absorption rather than variable costing? A. The absorption costing income would be P6,000 larger       B. The absorption costing income would be P6,000 smaller

Easylang Corp. produces a single product. The following cost structure applied to their first year of operations, 2000: (refer to image) Assume that during 2000 Easylang Corp. manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Easylang Corp.’s income be if it uses absorption rather than variable costing? A. The absorption costing income would be P6,000 larger       B. The absorption costing income would be P6,000 smaller

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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Easylang Corp. produces a single product. The following cost structure applied to their first year of operations, 2000: (refer to image) Assume that during 2000 Easylang Corp. manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Easylang Corp.’s income be if it uses absorption rather than variable costing?

A. The absorption costing income would be P6,000 larger
 
 
 
B. The absorption costing income would be P6,000 smaller
 
 
 
C. The absorption costing income would be P4,800 larger
 
 
 
D. The absorption costing income would be P4,000 smaller
Variable Costs per Unit P2.00 Annual Fixed Costs P14,000 P20,000 SG&A Production 4.00
Transcribed Image Text:Variable Costs per Unit P2.00 Annual Fixed Costs P14,000 P20,000 SG&A Production 4.00
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