Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $27,200   Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing    $fill in the blank 2 B. Which costing method provide higher net income? By how much? The     method provided more net income by $fill in the blank 4 .

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows:

Direct Material $16 per Unit
Direct Labor $26 per Unit
Variable Overhead $6 per Unit
Fixed Overhead $27,200  

Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory.

A. Compute net income under

i. Absorption Costing $fill in the blank 1

ii. Variable Costing    $fill in the blank 2

B. Which costing method provide higher net income? By how much?

The 

 

 method provided more net income by $fill in the blank 4 .

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