SQU Corporation manufactures 5 products to local market in Muscat. The following are the firm's costing data: Net Operating Income 2019 (Under Variable Costing) Increase in closing inventory (2019) (units) Total Fixed Manufacturing Overhead (2020) Sold units (2020) Total Variable Manufacturing Overhead | OMR120,000 | Other Fixed Costs (2020) (2020) Net Operating Income 2020 (Under Variable Costing) Other Variable Costs (2020) OMR250,000 | Production in units (2020) Sales (2020) OMR84,400 89,700 3,100 OMR60,000 620,000 50,000 OMR250,000 OMR50,000
SQU Corporation manufactures 5 products to local market in Muscat. The following are the firm's costing data: Net Operating Income 2019 (Under Variable Costing) Increase in closing inventory (2019) (units) Total Fixed Manufacturing Overhead (2020) Sold units (2020) Total Variable Manufacturing Overhead | OMR120,000 | Other Fixed Costs (2020) (2020) Net Operating Income 2020 (Under Variable Costing) Other Variable Costs (2020) OMR250,000 | Production in units (2020) Sales (2020) OMR84,400 89,700 3,100 OMR60,000 620,000 50,000 OMR250,000 OMR50,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:SQU Corporation manufactures 5 products to local market in Muscat. The following are the firm's costing data:
Net Operating Income 2019
(Under Variable Costing)
Increase in closing inventory (2019) (units)
Total Fixed Manufacturing Overhead (2020)
Sold units (2020)
Total Variable Manufacturing Overhead | OMR120,000 Other Fixed Costs (2020)
(2020)
Net Operating Income 2020
(Under Variable Costing)
Other Variable Costs (2020)
OMR250,000 | Production in units (2020)
Sales (2020)
OMR84,400
89,700
OMR60,000
620,000
OMR250,000
OMR50,000
3,100
50,000
(1) Assuming that the Fixed Manufacturing Overhead cost per unit is OMR2, calculate the
Net Operating Income under absorption costing for both 2019 and 2020.
(ii) Calculate the Breakeven Point in units under both scenarios of Variable and Absorption
costing for the year 2020 and provide your comments on the choice of costing between
Variable and Absorption in determining the BEP.
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