Edifice Manufacturing Company produces and sells a single product. During the current year,Edifice's fixed manufacturing overhead costs are $3 million, and the number of units sold equals thenumber of units produced. Which of the following amounts are the same under both variable costingand absorption costing?O Operating incomeCost of goods soldO Gross profitO Ending inventoryO None of the above

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Description: Edifice Manufacturing Company produces and sells a single product. During the current year,Edifice's fixed manufacturing overhead costs are $3 million, and the number of units sold equals thenumber of units produced. Which of the following amounts a

Absorption and variable costing are two methods that are generally used by an organization to value…

Business

Accounting

Edifice Manufacturing Company produces and sells a single product. During the current year, Edifice's fixed manufacturing overhead costs are $3 million, and the number of units sold equals t number of units produced. Which of the following amounts are the same under both variable cost and absorption costing? Operating income O Cost of goods sold O Gross profit

Edifice Manufacturing Company produces and sells a single product. During the current year, Edifice's fixed manufacturing overhead costs are $3 million, and the number of units sold equals t number of units produced. Which of the following amounts are the same under both variable cost and absorption costing? Operating income O Cost of goods sold O Gross profit

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Edifice Manufacturing Company produces and sells a single product. During the current year,
Edifice's fixed manufacturing overhead costs are $3 million, and the number of units sold equals the
number of units produced. Which of the following amounts are the same under both variable costing
and absorption costing?
O Operating income
Cost of goods sold
O Gross profit
O Ending inventory
O None of the above

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1. Assume that the company uses absorption costing A) compute the unit product cost B) prepare an income statement for a year(do not leave empty spaces;input a 0 whatever it is required) 2. Assume the company uses variable costing A) compute the unit product cost B) prepare an income statmement(input 0 on empty spaces)
Based on the following information, prepare a contribution margin income statement assuming the company uses variable costing. Annual production Sales price Variable production cost per unit Direct materials 50,000 units $40 per unit $10 3 Direct labor $25 per unit Manufacturing overhead Fixed production costs 12. $150,000 each year; $3 per unit at 50,000 units of production Variable selling and administrative cost $1 per unit Fixed selling and administrative cost $100,000 each year Sales: А. Var. Production В. Var Selling & Admin 50,000 1,300,000 Contribution Margin С. Fixed Expenses: Fixed Mfg Overhead 150,000 Fixed Selling & Admin 100,000 250,000 Net Income D.