The level of inventory of a manufactured product has increased by 7,827 units during a period. The following data are also available: VariableFixedUnit manufacturing costs of the period$13$3Unit operating expenses of the period$4$1What would be the effect on income from operations if absorption costing is used rather than variable costing?a.$23,481 increaseb.$31,308 increasec.$23,481 decreased.$31,308 decrease

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Description: The level of inventory of a manufactured product has increased by 7,827 units during a period. The following data are also available: VariableFixedUnit manufacturing costs of the period$13$3Unit operating expenses of the period$4$1What would be the e

Under variable costing system, the fixed expenses are considered as period cost and charged to…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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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