I need answer of this question solution general accounting The level of inventory of a manufactured product has increased by 7,000 unitsduring a period. The following data are also available:Variable Fixed$6.00Unit manufacturing costs of the period $12.00Unit operating expenses of the period 4.001.50What would be the effect on income from operations if absorption costing isused rather than variable coding?a. $42,000 decreaseb. $42,000 increasec. $62,500 increased. $52,500 decrease

Step 1: Define Absorption costingAbsorption costing is the accounting method where all the…

Answered: The level of inventory of a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 1PB: When prices are falling (deflation), which costing method would produce the highest gross margin for...

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Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
The level of inventory of a manufactured product has increased by 7,780 units during a period. The following data are also available: Fixed $4.00 1.00 Variable Unit manufacturing costs of the period Unit operating expenses of the period The effect on operating income if absorption costing is used rather than variable costing would be a Oa. a. $31,120 decrease Ob. $38,900 increase Oc. $38,900 decrease d. $31,120 increase $13.00 2.00
The level of inventory of a manufactured product has increased by 9,022 units during a period. The following data are also available: Line Item Description Variable Fixed Unit manufacturing costs of the period $14.00 $5.00 Unit operating expenses of the period 4.00 3.00 The effect on operating income if absorption costing is used rather than variable costing would be a a. $72,176 increase b. $45,110 decrease c. $45,110 increase d. $72,176 decrease
The level of inventory of a manufactured product has increased by 5,000 units during a period. The following data are also available: Unit manufacturing costs of the period Unit operating expenses of the period Variable Fixed $24.00 $10.00 8.00 3.00 The effect on operating income if variable costing is used rather than absorption costing would be a a. $65,000 decrease O b. $50,000 decrease Oc. $50,000 increase O d. $65.000 increase
The level of inventory of a manufactured product has increased by 7,871 units during a period. The following data are also available: Variable Fixed $12.00 $7.00 1.00 4.00 Unit manufacturing costs of the period Unit operating expenses of the period The effect on operating income if variable costing is used rather than absorption costing would be a(n) a. $55,097 increase Ob. $55,097 decrease Oc. $86,581 increase Od. $86,581 decrease
The level of inventory of a manufactured product has increased by 6,980 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $10.00 $3.00 Unit operating expenses of the period 1.00 5.00 The effect on operating income if absorption costing is used rather than variable costing would be a a.$55,840 decrease b.$55,840 increase c.$20,940 decrease d.$20,940 increase
The level of inventory of a manufactured product has increased by 7,819 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $13.00 $8.00 Unit operating expenses of the period 1.00 3.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a.$86,009 increase b.$86,009 decrease c.$62,552 decrease d.$62,552 increase
The level of inventory of a manufactured product has increased by 7,534 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12 $7 Unit operating expenses of the period $2 $1 What would be the effect on income from operations if variable costing is used rather than absorption costing? a.$60,272 decrease b.$52,738 decrease c.$52,738 increase d.$60,272 increase
The level of inventory of a manufactured product has increased by 7,616 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $13.00 $7.00 Unit operating expenses of the period 1.00 5.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $91,392 decrease Ob. $53,312 increase Oc. $91,392 increase Od. $53,312 decrease
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The level of inventory of a manufactured product has increased by 8,366 units during a period. The following data are also available: Line Item Description Variable Fixed Unit manufacturing costs of the period $14.00 $8.00 Unit operating expenses of the period 2.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a. $100,392 increase b. $66,928 decrease c. $66,928 increase d. $100,392 decrease
The level of inventory of a manufactured product has increased by 7,827 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $13 $3 Unit operating expenses of the period $4 $1 What would be the effect on income from operations if absorption costing is used rather than variable costing? a.$23,481 increase b.$31,308 increase c.$23,481 decrease d.$31,308 decrease

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