The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $6.00 1.50 Unit operating expenses of the period 4.00 What would be the effect on income from operations if absorption costing is used rather than variable coding? a. $42,000 decrease b. $42,000 increase c. $62,500 increase d. $52,500 decrease

The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $6.00 1.50 Unit operating expenses of the period 4.00 What would be the effect on income from operations if absorption costing is used rather than variable coding? a. $42,000 decrease b. $42,000 increase c. $62,500 increase d. $52,500 decrease

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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