Net operating income under Variable costing system and Absorption costing method: Variable Costing is a costing method which comprises of only variable manufacturing costs . Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead . Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced. . Operating income we get by reducing the fixed expenses from the contribution margin. If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

provide answer A B C step by step

Please provide the correct answer to this general accounting problem using valid calculations.

What is flored net pay ?? Accounting

Answer 2

Question

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Answer 6

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Answer 7

Chapter 6, Problem 12F15

To determine

Net operating income under Variable costing system and Absorption costing method:

Variable Costing is a costing method which comprises of only variable manufacturing costs. Variable manufacturing costs include direct materials, direct labor and variable manufacturing overhead.

Absorption Costing is different from variable costing. It comprises of direct materials, direct labors and both variable and fixed manufacturing overhead. Thus in absorption costing all of the manufacturing costs is absorbed by the units produced.

.

Operating income we get by reducing the fixed expenses from the contribution margin.

If the company produces 5000 fewer units than it sells in the second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in year 2.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 6.A - Prob. 1E Ch. 6.A - EXERCISE 6A-2 Super-Variable Costing and Variable...Ch. 6.A - Prob. 3E Ch. 6.A - PROBLEM 6A-4 Super-Variable Costing and Variable...Ch. 6.A - Prob. 5P Ch. 6 - Prob. 1Q Ch. 6 - Are selling and administrative expenses treated as...Ch. 6 - Explain how fixed manufacturing overhead costs are...Ch. 6 - What are the arguments in favor of treating fixed...Ch. 6 - What are the arguments in favor of treating fixed...

Concept explainers

Videos

Want to see the full answer?

Chapter 6 Solutions