Young Corporation Young Corporation produces a single product. The following cost structure applied to its first year of operations: Variable costs: SG&A $2 per unit Production $4 per unit Fixed costs (total cost incurred for the year): SG&A $14,000 Production $20,000 Refer to Young Corporation. Assume for this question only that during the current year Young Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Young Corporation's income be if it uses absorption rather than variable costing? Select one: a. The absorption costing income would be $6,000 smaller. b. The absorption costing income would be $4,000 smaller. c. The absorption costing income would be $6,000 larger. d. The absorption costing income would be $4,800 larger.
Young Corporation Young Corporation produces a single product. The following cost structure applied to its first year of operations: Variable costs: SG&A $2 per unit Production $4 per unit Fixed costs (total cost incurred for the year): SG&A $14,000 Production $20,000 Refer to Young Corporation. Assume for this question only that during the current year Young Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Young Corporation's income be if it uses absorption rather than variable costing? Select one: a. The absorption costing income would be $6,000 smaller. b. The absorption costing income would be $4,000 smaller. c. The absorption costing income would be $6,000 larger. d. The absorption costing income would be $4,800 larger.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Young Corporation
Refer to Young Corporation. Assume for this question only that during the current year Young Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Young Corporation's income be if it uses absorption rather than variable costing?
Young Corporation produces a single product. The following cost structure applied to its first year of operations:
| Variable costs: | |
| SG&A | $2 per unit |
| Production | $4 per unit |
| Fixed costs (total cost incurred for the year): | |
| SG&A | $14,000 |
| Production | $20,000 |
Refer to Young Corporation. Assume for this question only that during the current year Young Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. How much larger or smaller would Young Corporation's income be if it uses absorption rather than variable costing?
Select one:
a. The absorption costing income would be $6,000 smaller.
b. The absorption costing income would be $4,000 smaller.
c. The absorption costing income would be $6,000 larger.
d. The absorption costing income would be $4,800 larger.
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