What would be the effect on income from operations if absorption costing is used? The level of inventory of a manufactured product hasincreased by 8,500 units during a period. The following dataare also available:Variable Fixed$7.502.00Unit manufacturing costs of the period $14.00Unit operating expenses of the period 5.00What would be the effect on income from operations ifabsorption costing is used rather than variable costing?(a) $63,750 decrease(b) $63,750 increase(c) $78,500 increase(d) $52,000 decrease

Explanation of Absorption Costing: Absorption costing is a product costing method that assigns all…

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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When prices are rising (inflation), which costing method would produce the highest value for gross margin? Choose between first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average (AVG). Evansville Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming A62 sold just one unit of these goods for $10,000. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units that were manufactured during the period and 52,800 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are 14.70 per unit, and variable manufacturing costs are 30 per unit. Determine (A) whether variable costing operating income is less than or greater than absorption costing operating income, and (B) the difference in variable costing and absorption costing operating income.
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 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 8,413 units during a period. The following data are also available: Varlable Fixed Unit manufacturing costs of the period $11.00 $6.00 Unit operating expenses of the period 1.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $50,478 increase Ob. s50,478 decrease Oc. s84,130 decrease Od. S84,130 increase Pre Submit Tes
The level of inventory of a manufactured product has increased by 7,741 units during a period. The following data are also available: Fixed Unit manufacturing costs of the period $7.00 Unit operating expenses of the period 4.00 1.00 The effect on operating income if variable costing is used rather than absorption costing would be a[n) O $61.920 decrease Ob. 161.928 increase O$54.187 increase d. 554.107 decrease Variable $10.00
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 7,848 units during a period. The following data are also available Variable Fixed Unit manufacturing costs of the period $11.00 $3.00 Unit operating expenses of the period 2.00 5.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $23,544 increase Ob. $62,784 decrease Oc. $62,784 increase Od. $23,544 decrease
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
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 7,675 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $11.00 $8.00 Unit operating expenses of the period 4.00 2.00 The effect on operating income if absorption costing is used rather than variable costing would be a a.$61,400 decrease b.$61,400 increase c.$76,750 decrease d.$76,750 increase
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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