Manta Ray Company manufactures diving masks with a variable cost of $35. The masks sell for $44. Budgeted fixed manufacturing overhead for the most recent year was $799,000. Actual production was equal to planned production. 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. (Do not round intermediate calculations.) 1. Production Sales 94,000 units 92,000 units 2. Production Sales 3. Production 85,000 units 91,600 units 82,000 units Sales 82,000 units Answer is not complete. Income Higher Under Amount of Difference (Method) 1. Absorption costing 2. Variable costing 3. Same under both

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Manta Ray Company manufactures diving masks with a variable cost of $35. The masks sell for $44. Budgeted fixed manufacturing
overhead for the most recent year was $799,000. Actual production was equal to planned production.
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. (Do not round intermediate calculations.)
94,000 units
1. Production
Sales
92,000 units
2. Production
85,000 units
Sales
91,600 units
3. Production
82,000 units
Sales
82,000 units
Answer is not complete.
Income Higher Under
Amount of
(Method)
1.
Absorption costing
23
2.
Variable costing
3.
Same under both
Difference
Transcribed Image Text:Manta Ray Company manufactures diving masks with a variable cost of $35. The masks sell for $44. Budgeted fixed manufacturing overhead for the most recent year was $799,000. Actual production was equal to planned production. 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. (Do not round intermediate calculations.) 94,000 units 1. Production Sales 92,000 units 2. Production 85,000 units Sales 91,600 units 3. Production 82,000 units Sales 82,000 units Answer is not complete. Income Higher Under Amount of (Method) 1. Absorption costing 23 2. Variable costing 3. Same under both Difference
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