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Variable Costing-Sales Exceed Production The beginning inventory is 24,100 units. All of the units that were manufactured dur

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Answer #1

Under variable costing there is only variable overheads considered for computation of operating income., Which is kept fixed cost seperately from production.

But under absorption costing method, both fixed and variable overheads considered for getting operating income.

Q no. a)

✓That too when sales exceeded the production level i.e. along with beginning inventory, then obviously ending inventory is less than the beginning inventory, hence operating income under absorption costing is greater than variable costing method.,

Q.no . b)

✓difference of variable and absorption costing operating income is equal to the difference of variable and fixed cot per unit i.e =($110-$62)=$48

=$48*24,100

=$1,156,800

**********

Thank you:-)

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