Variable and Absorption Costing Chandler Company sells its product for $100 per unit. Variable manufacturing costs per unit are $40, and fixed manufacturing costs at the normal operating level of 10,000 units are $240,000 Variable seling expenses are $16 per unit sold. Fived administrative expenses total $104,000 Chandler had no beginning inventory in Year 1 Duning the year, the company produced 10.000 units and sold 8.000. Would net income for Chandler Company in Year 1 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method Donate negative signs with any answers Absorption Costing Income Statement Sales Cest of Goods Sold Beginning Invereiry Variable Costs Feed Costs Cost of Goods Sold Gross profit Selling expense Net Income Cost of Good So Beginning inventory Vrate Cos # # Less Ending inventary IM Variable cost of goods sold variable selling expense Contribution margin Manufacturing cost Addrative Expen Total Fund Co Net Income OM ON Variable Cesting Income Statement IM 14 240,000 512.000 1 DV ON ON 4241000 104.000 800,000 288,000 ON 232.000 54.000 S ON $ 800.000 320.000 128.000 344,000 8.000
Variable and Absorption Costing Chandler Company sells its product for $100 per unit. Variable manufacturing costs per unit are $40, and fixed manufacturing costs at the normal operating level of 10,000 units are $240,000 Variable seling expenses are $16 per unit sold. Fived administrative expenses total $104,000 Chandler had no beginning inventory in Year 1 Duning the year, the company produced 10.000 units and sold 8.000. Would net income for Chandler Company in Year 1 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method Donate negative signs with any answers Absorption Costing Income Statement Sales Cest of Goods Sold Beginning Invereiry Variable Costs Feed Costs Cost of Goods Sold Gross profit Selling expense Net Income Cost of Good So Beginning inventory Vrate Cos # # Less Ending inventary IM Variable cost of goods sold variable selling expense Contribution margin Manufacturing cost Addrative Expen Total Fund Co Net Income OM ON Variable Cesting Income Statement IM 14 240,000 512.000 1 DV ON ON 4241000 104.000 800,000 288,000 ON 232.000 54.000 S ON $ 800.000 320.000 128.000 344,000 8.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Variable and Absorption Costing
Chandler Company sells its product for $100 per unit. Variable manufacturing costs per unit are $40, and fixed manufacturing costs at the normal operating level of 10,000 units are $240,000 Variable
selling expenses are $16 per unit sold. Fixed administrative expenses total $104,000 Chandler had no beginning inventory in Year 1. During the year, the company produced 10.000 units and sold
8.000. Would net income for Chandler Company in Year 1 be higher if calculated using variable costing or using absorption costing?
Calculate reported income using each method
Do not use negative signs with any answers
Absorption Costing Income Statement
Salv
Cest of Goods Sold
Beginning Invereary
Variable costs
Fed Costs
Unis Ending Inventory
Cost of Goods Sold
Gross profit
Selling expense
Adonnatrative expense
Net income
Sales
Cent of Good So
Deginning Inventory
Varia Cos
Less Ending inventary
Variable cost of goods sold
Variable selling expense
Contibution margin
Fixed cos
Manufacturing cost
Admistrative Expense
Total Fixed Cou
Net Income
#
#M
Variable Cesting Income Statement
4 M
05
CON
240,000
512.000
1 M
4 M
$800,000
0
ON
ON
240,000
104.000
CON
288.000
ON
232,000
56000
5 800.000✔
320.000
128.000
344,000
8.000
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