In the previous year, a company’s total fixed manufacturing overhead costs were P13,600 and its total variable production costs were P15,000. There were no units in beginning inventory, 10,000 units were produced, and 9,200 units were sold. How much lower is the operating income for the previous year using direct (variable) costing versus absorption costing?

Q: company's net operating income for the year would be:

A: The Variable costing is a cost accounting method which includes only variable costs for producing…

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A: Variable cost is the cost which changes with change in production volume and fixed cost is the cost…

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A: Solution:- Calculation of contribution margin per unit as follows under:-

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A: Absorption costing: It is related with all the cost for manufacturing the product of the…

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A: Decrease in operating income if variable costing is used = Increase in level of inventory x fixed…

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A: Lets understand the basics.Product cost can be calculated using,(1) Variable costing (2) Absorption…

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A: Working note: Computation of cost of goods sold:

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A: The Cost of Particulars Manufactured( COGM) is a  fiscal  standard that displays the total product…

Q: If a company produces 10,000 units and sells 8,000 units during a period, which method of computing…

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Q: Based on variable costing, what would NUBD Corp. show as the value of its ending inventory?

A: Under variable costing fixed cost is not taken into account. The variables cost like direct…

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A: Solution: Contribution margin for April = Sales - cost of goods sold - variable selling expense -…

Q: gross margin (loss)

A: Gross Margin is the residual income available after reduction of manufacturing costs and other…

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A: Decrease in Inventory = Operating Income Differences / Fixed manufacturing overhead cost per unit =…

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A: The objective of the question is to compare the operating income under variable costing and…

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A: Difference in Units=Difference in Net income Fixed Manufacturing overhead per unit

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A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…

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A: To determine the net profit under variable costing, we need to understand the difference between…

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A: Profit under absorption costing is higher as compare to profit under variable costing , it means…

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A: Solution: Variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead…

Q: Shalom Company provided the following data pertaining to its unit costs: Fixed selling Variable…

A: The unit cost is calculated as total cost divided by number of units produced. Using variable…

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A: The objective of the question is to find out the production units of the company last month. The…

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A: Under absorption costing, fixed manufacturing overhead is treated as product cost. Under variable…

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Q: ow do I prepare an income statement based on variable co

A: In managerial accounting, variable costing is a cost concept. During the creation of a product…

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A: The Contribution margin is the difference between the sales revenue and the variable costs.…

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A: Product cost per unit is the cost incurred to produce the product. Product cost per unit under…

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Q: During the previous year, Casually Company had the following data: Units in beginning inventory…

A: 1.  Product cost Per Unit under absorption costing, would be calculated as follows :  Particular…

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A: The difference in the net operating income of variable costing and absorption costing occurs only…

Q: unit cost of goods manufactured,

A: Variable costing refers to the concept which assigns the cost to inventory. Absorption costing…

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A: Under Variable costing only, Variable manufacturing costs (i.e., Direct materials, Direct Labor and…

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A: Operating income is the income after deducting all expenses related to the operation of the…

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A: Solution:- Calculation of the contribution margin as  follows under:- Introduction:- The following…

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Q: Need help

A: Step 1: Introduction to the Ending InventoryEnding Inventory is the amount of inventories that…

Q: OMR10,000 ; Finished goods inventory has decreased by OMR20,000. How much iIs the manufacturing…

A: The correct option is:  d. OMR 95,000 Particulars Amount (OMR) Sales revenue 410,000 Less:…

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.