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In its first year of operations, KLM Industries had the following costs when it produced 120,000 units and sold 100,000 units of its only product: Manufacturing costs: Fixed $240,000 Variable $180,000 Selling and administrative costs: Fixed $110,000 Variable $50,000 How much lower would KLM's net income be if it used variable costing instead of absorption costing?

In its first year of operations, KLM Industries had the following costs when it produced 120,000 units and sold 100,000 units of its only product: Manufacturing costs: Fixed $240,000 Variable $180,000 Selling and administrative costs: Fixed $110,000 Variable $50,000 How much lower would KLM's net income be if it used variable costing instead of absorption costing?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 16DQ
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Hoy much lower would KLM s net income

In its first year of operations, KLM Industries had the following costs when it produced 120,000 units and sold 100,000 units of its only product: Manufacturing costs: Fixed $240,000 Variable $180,000 Selling and administrative costs: Fixed $110,000 Variable $50,000 How much lower would KLM's net income be if it used variable costing instead of absorption costing?
Transcribed Image Text:In its first year of operations, KLM Industries had the following costs when it produced 120,000 units and sold 100,000 units of its only product: Manufacturing costs: Fixed $240,000 Variable $180,000 Selling and administrative costs: Fixed $110,000 Variable $50,000 How much lower would KLM's net income be if it used variable costing instead of absorption costing?
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