You obtain the following information regarding fixed production costs from a manufacturing firm for fiscal year 2021:Fixed costs in the beginning inventory - P16,000Fixed costs incurred this period - P100,000Which of the following statements is not true:Using variable costing, this firm will deduct no more than P16,000 for fixed production costs.The maximum difference between this firm’s 2021 income based on absorption costing and its income based on variable costing is P16,000.The maximum amount of fixed production costs that this firm could deduct using absorption costs in 2021 is P116,000.If this firm produced substantially more units than it sold in 2021, variable costing will probably yield a lower income than absorption costing.

1. Fixed cost deduction under variable costing = P100,000 to P100,000 2. Fixed cost deduction under…

Answered: You obtain the following information…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

You obtain the following information regarding fixed production costs from a manufacturing firm for fiscal year 2021:

Fixed costs in the beginning inventory - P16,000
Fixed costs incurred this period - P100,000

Which of the following statements is not true:

Using variable costing, this firm will deduct no more than P16,000 for fixed production costs.
The maximum difference between this firm’s 2021 income based on absorption costing and its income based on variable costing is P16,000.
The maximum amount of fixed production costs that this firm could deduct using absorption costs in 2021 is P116,000.
If this firm produced substantially more units than it sold in 2021, variable costing will probably yield a lower income than absorption costing.

Expert Solution