Exercise 8-24 Difference in Operating Income under Absorption and Variable Costing (LO 8-1,8-4) Bianca Bicycle Company manufactures mountain bikes with a variable cost of $3,000. The bicycles sell for $3,750 each. Budgeted fixed manufacturing overhead for the most recent year was $13,000,000. Planned and actual production for the year were the same. Required: State whether operating income is higher under variable or absorption costing and the amount of the difference in reported operating Income under the two methods. Treat each condition as an independent case. (Round intermediate calculations to 2 decimal places 1. Production Sales 2. Production Sales Production Sales 3. Income Higher Under (Method) 1. Variable costing 2 24,000 units 29,000 units 14,600 units 14,600 units 14,000 units 10,800 units Amount of Difference

Exercise 8-24 Difference in Operating Income under Absorption and Variable Costing (LO 8-1,8-4) Bianca Bicycle Company manufactures mountain bikes with a variable cost of $3,000. The bicycles sell for $3,750 each. Budgeted fixed manufacturing overhead for the most recent year was $13,000,000. Planned and actual production for the year were the same. Required: State whether operating income is higher under variable or absorption costing and the amount of the difference in reported operating Income under the two methods. Treat each condition as an independent case. (Round intermediate calculations to 2 decimal places 1. Production Sales 2. Production Sales Production Sales 3. Income Higher Under (Method) 1. Variable costing 2 24,000 units 29,000 units 14,600 units 14,600 units 14,000 units 10,800 units Amount of Difference

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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