Which costing method, absorption or variable, would show higher operating income and by what amount?A. Absorption costing, P2,500B. Variable costing, P2,500C. Absorption costing, P5,500D. Variable costing, P5,500 Selected data concerning the operations of NUBD Company for the year endedDecember 31, 2021 is available as follows:Units producedUnits soldDirect materials usedDirect labor incurredFixed factory overhead10,000 Variable factory overhead9,000 Fixed selling & admin. expP 40,000 Variable selling & admin. exp.P 20,000 | Finished goods inventory, beg.P 25,000P12,00030,0004,500noneThere were no work in process inventory at the beginning and end of 2021.

The difference of net income between absorption and variable costing occurs due to only fixed…

Which costing method, absorption or variable, would show higher operating income and by what amount? A. Absorption costing, P2,500 B. Variable costing, P2,500 C. Absorption costing, P5,500 D. Variable costing, P5,500

Which costing method, absorption or variable, would show higher operating income and by what amount? A. Absorption costing, P2,500 B. Variable costing, P2,500 C. Absorption costing, P5,500 D. Variable costing, P5,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which costing method, absorption or variable, would show higher operating income and by what amount?

A. Absorption costing, P2,500

B. Variable costing, P2,500

C. Absorption costing, P5,500

D. Variable costing, P5,500

Selected data concerning the operations of NUBD Company for the year ended
December 31, 2021 is available as follows:
Units produced
Units sold
Direct materials used
Direct labor incurred
Fixed factory overhead
10,000 Variable factory overhead
9,000 Fixed selling & admin. exp
P 40,000 Variable selling & admin. exp.
P 20,000 | Finished goods inventory, beg.
P 25,000
P12,000
30,000
4,500
none
There were no work in process inventory at the beginning and end of 2021.

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