S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the manufactured product remained unchanged. The manufacturing costs were as follows: Variable Fixed Unit manufacturing costs of the period $ 11.00 $ 7.00 Unit operating expenses of the period 3.00 2.50 Which of the following statements is true? a. Net income under absorption costing will be $40,000 more than under variable costing. b. Net income will be the same under both variable and absorption costing. c. Net income under variable costing will be $45,000 less than net income under absorption costing. d. The difference in net income cannot be determined.
S&P Enterprises sold 10,000 units of inventory during a given period. The level of inventory of the manufactured product remained unchanged. The manufacturing costs were as follows: Variable Fixed Unit manufacturing costs of the period $ 11.00 $ 7.00 Unit operating expenses of the period 3.00 2.50 Which of the following statements is true? a. Net income under absorption costing will be $40,000 more than under variable costing. b. Net income will be the same under both variable and absorption costing. c. Net income under variable costing will be $45,000 less than net income under absorption costing. d. The difference in net income cannot be determined.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...
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