The SIMple Company manufactures a single product; the standard costs per unit being variable manufacturing $8, fixed manufacturing $6. Selling and administrative costs are $2 per unit sold. The selling price is $20 per unit. Actual and budgeted fixed overhead is $900,000 for the year. Information about the company’s production activity for the year is: Units produced 150,000 Units sold 125,000 Units in opening inventory 5,000 Assuming all information is provided above, the difference in profit between absorption and variable costing would be expected to be: Question 7 options: 1) 25,000 x $8 2) 30 000 x $8 3) 25 000 x $6 4) 30 000 x $6
The SIMple Company manufactures a single product; the standard costs per unit being variable manufacturing $8, fixed manufacturing $6. Selling and administrative costs are $2 per unit sold. The selling price is $20 per unit. Actual and budgeted fixed overhead is $900,000 for the year. Information about the company’s production activity for the year is: Units produced 150,000 Units sold 125,000 Units in opening inventory 5,000 Assuming all information is provided above, the difference in profit between absorption and variable costing would be expected to be: Question 7 options: 1) 25,000 x $8 2) 30 000 x $8 3) 25 000 x $6 4) 30 000 x $6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The SIMple Company manufactures a single product; the standard costs per unit being variable manufacturing $8, fixed manufacturing $6. Selling and administrative costs are $2 per unit sold. The selling price is $20 per unit. Actual and budgeted fixed overhead is $900,000 for the year. Information about the company’s production activity for the year is:
Assuming all information is provided above, the difference in profit between absorption and variable costing would be expected to be:
|
Units produced
|
150,000
|
|
Units sold
|
125,000
|
|
Units in opening inventory
|
5,000
|
Assuming all information is provided above, the difference in profit between absorption and variable costing would be expected to be:
Question 7 options:
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education