When units manufactured exceed the units sold, the variable costing income from operations will be less than it is for absorption costing.
The answer is thus b)
In variable costing, When units manufactured > units sold, then Variable costing Income from operations >...
In variable costing, When units manufactured < units sold, then Variable costing Income from operations > absorption costing O Variable costing income from operations < absorption costing O Variable costing from income of operations = absorption costing O It is impossible inventory would be negative!
In absorption costing, When units manufactured > units sold, 1. then inventory 2. the change in inventory is related to 1. Finished goods inventory increases 2. Reduction of fixed manufacturing overhead to beginning inventory 1. Finished goods inventory decreases 2. Allocation of fixed manufacturing overhead to ending inventory 1. Finished goods inventory increases 2. Allocation of variable manufacturing overhead to ending inventory 1. Finished goods inventory increases 2. Allocation of fixed manufacturing overhead to ending inventory C QUESTION 11 If...
Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31 Marshall Inc. estimated the following operating results: Sales (13,600 x $48) $652,800 Manufacturing costs (13,600 units): Direct materials 393,040 Direct labor 92,480 Variable factory overhead 43,520 Fixed factory overhead 51,680 Fixed selling and administrative expenses 14,100 Variable selling and administrative expenses 17,000 The company is evaluating a proposal to manufacture 15,200 units instead of 13,600 units, thus creating an Inventory, October 31...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 6,300 units and sold 5,400 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $1,620,000 Variable cost of goods sold: Variable cost of goods manufactured $907,200 Inventory, December 31 (129,600) Total variable cost of goods sold 777,600 Manufacturing...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 4,000 units and sold 3,400 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $986,000 Variable cost of goods sold: Variable cost of goods manufactured $556,000 Inventory, December 31 (83,400) Total variable cost of goods sold 472,600 Manufacturing...
Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement LO3-3] Superior Company provided the following data for the year ended December 31 (al raw materials are used in production as direct materials) Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 217,000 $ 267,000 $ 151,000 $ 371,000 $ 354,000 Inventory balances at the beginning and end of the year were...
Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept $4,440,000 Sales (96,000 units) Cost of goods sold: Cost of goods manufactured Less ending inventory (24,000 units) Cost of goods sold $3,120,000 624,000 2.496.000 Gross profit $1,944,000 288,000 Selling and administrative expenses Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and...
Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 11,900 flat panel televisions, of which 10,900 were sold. Operating data for the month are summarized as follows: Sales $1,798,500 Manufacturing costs: Direct materials $928,200 Direct labor 273,700 Variable manufacturing cost 238,000 Fixed manufacturing cost 119,000 1,558,900 Selling and administrative expenses: Variable $141,700 Fixed 65,200 206,900 Required: 1. Prepare an income statement based on the absorption...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 5,300 units and sold 4,600 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 2011 Sales $2,300,000 Variable cost of goods sold: Variable cost of goods mantectured $1,272,000 Inventory, December 31 (168,000) Total variable cost of goods sold 1,104,000 Manufacturing...
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 5,500 units and sold 4,700 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $1,034,000 Variable cost of goods sold: Variable cost of goods manufactured $583,000 EInventory, December 31 (84,800) Total variable cost of goods sold 498,200 Manufacturing...