Ask Experts Questions for FREE Help !
Ask
    KissandraRaven's Avatar
    KissandraRaven Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 17, 2011, 05:25 PM
    Switching from variable to absorption costing?
    The level of inventory of a manufactured product has increased by 8,000 units during a period. The following data are also available:

    Variable: Fixed:
    Unit manufaacturing Costs of the period $24 $10
    Unit operating expenses of the period $8 $3

    What would be the effect on income from operations if absorption costing is used rather than variable costing?

    a) $80,000 decrease
    b) $80,000 increase
    c) $88,000 increase
    d) $104,000 increase
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
    Ultra Member
    		  
    #2

    May 17, 2011, 06:57 PM

    Please read this announcement first.

    Ask Me Help Desk - Announcements in Forum : Homework Help

    The way to approach this problem is to first read the definitions of variable and absorption costing. What is the difference between the two? If you would like to do that and tell us what you think is the correct answer and why, we can review it for you and see if you are understanding. Thanks.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Income statements under absorption costing and variable costing [ 3 Answers ]

One the absorption income statement I worked backwards from the income of operations which my book provided to help with the problem. What I do not understand is how to get the number for cost of goods sold. I do not know what to put together to get this number. I have done the absorption...

Preparing an income statement under absorption costing and variable costing [ 5 Answers ]

Stonehenge Inc. a manufacturer of landscaping blocks, began operations on April 1 of the current year. During this time, the company produced 750,000 units and sold 720,000 units at a sales price of $9 per unit. Cost information for this period is shown below. Produciton costs Direct...

View more questions Search