The net profit of a company for a year on a variable costing basis is $92,000. On an absorption costing basis, the net profit is $78,800. Fixed manufacturing overhead costs per unit were the same in both the prior and current year (i.e. $1.10 per unit). What was the change in inventory over the year? a) Decrease of 9,500 units b) Increase of 12,000 units c) Decrease of 12,000 units d) Increase of 9,500 units

The net profit of a company for a year on a variable costing basis is $92,000. On an absorption costing basis, the net profit is $78,800. Fixed manufacturing overhead costs per unit were the same in both the prior and current year (i.e. $1.10 per unit). What was the change in inventory over the year? a) Decrease of 9,500 units b) Increase of 12,000 units c) Decrease of 12,000 units d) Increase of 9,500 units

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 6EA: During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of...

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General Accounting question
Last year, Stephen Company had 20,000 units in its ending inventory. During the year, Stephen Company's variable production costs were $12 per unit. The fixed manufacturing overhead cost was $8 per unit in the beginning inventory. The company's operating income for the year was $9,600 higher under variable costing than it was under absorption costing. Given these facts, what must have been the number of units of product in the beginning inventory last year? a. 18,800 units b. 19,200 units c. 19,520 units d. 21,200 units
The variable-costing income statement for Jackson Company for last year is as follows: Sales (5,000 units) $ 105,200 Variable expenses: Cost of goods sold $29,900 Selling(10% of sales) 10,520 40,420 Contribution margin 64,780 Fixed expenses: Manufacturing overhead 24,600 administrative 14,600 39,200 Operating Income 25,580 Selected data for last year concerning the operations of the company are as follows: Beginning inventory: 0 units Units produced: 9,000 units Manufacturing costs: Direct labor: 3.50 per unit Direct materials: 1.60 per unit Variable overhead: 1.20 per unit 1. Prepare an absorption costing income statement for last year