Question

OBJ. 2 anable manufacturing costs are $126 per unit, and fixed manufacturing costs are Sales are estimated to be 10,000 units. $157,500. EE 5-4o 19! PE 5-4B Analyzing income under absorption and variable costing ". How much would absorption costing income from operations differ between a plat to produce 10,000 units and a plan to produce 15,000 units? ". How much would variable costing income from operations differ between the b ow production plans? OBL4

Answer 1

14 10,000 units are produced, all Sexed costs are included in cost of goods sold; if 15000 units are presduced, fixed costs 07.9 10.50 / 157500/15000) pere und/ would be included in ending inventorey (5000 units). he (15000 uncits – 10,0a unet) ! = |(157500/15000 ) ( 15000 - 10,000) = ($10.50 X 5000) = 9 52,500 (Ans). Alternatively, 10.000 units X($15.95* - $10.5037 (10,000 units xps.as-) > $53,500 Cans) * / $ 157500 - 10,000 units) - $ 15.75 * $ 157500 + 15 000 units ) - §. 10.50 Answer: a) $ 52,500

© Remembere thed since all fexed manufacturing costs are treated as period expenses ! under variable costeing there are no differences in income beskeveen the fecio plare So answer would be $0 - Answer