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 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 |
$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
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