Question

do both requirements

HW Score: 0%, 0 of 100 pts 42 ot 9 (0 complete) Score: 0 of 7 pts Question Hap a E21-17 (similar to) S percae (55 manufacturing and $2 selling and administrative)and total fxed costs were $70,000 April 2014. The sales prioe was $28, variable costs wene had no begining Finished Goods the cost per unit and the total cost of the 1,000 cases in Finished Ooods inventory as of Apri 30 ReplenAde produced 15.000 cases of powdered drink mix and sold 14,000 cases in Inventory ReplenAde cailated t (545,000 mandfacturing and $25,000 seling and administrative) The company EE (Click the leon to view t Read the treaurements and variable costing methods The caloulations are presented below the calcuiations using the absortion and varlable costing methods) both the absorption Requirement 1. Which costing method produces the highest operating income? Explain why are distributed across the entine production run as part of the unit cost cost method produces the highest operating income. The primary reason for this is that vanatble cossing methed Requirements Data Table Which 0osting mehod produces the highest operating income? Explain wh 30, 2014 2 hich coaling matiod grodaces he highest Apli 30 balance in Firvshed Goods Inventory? Explan why Variable manufactuing cost er case . Fixed mandfacturing overhead per case Peint Done Total product oost per case x№mber of cases r, Firished Goods iw dry 8.000 $ 5,000 Total cost of Finished Goods inventory Print Done Enter your anw Clear All part

Answer 1

The Absorption costing method produces the hghest operating income.
The primary reason for this is that fied manufacturing cost are distributed across the entire production run as part of unit cost.
Under Absorption costing, $ 5000 of fixed manufacturing cost is deferred.
Underr the variable costing, this amount is fully charged.