ZB Toys started 2017 with no inventories. During the year, their expected and actual production was...

   

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ZB Toys started 2017 with no inventories. During the year, their expected and actual production was 30,000 units, of which they sold 24,000 units at $50 each. Cost data for the year is as follows: D (Click the icon to view the cost data.) Calculate ZB Toys' operating income under (a) variable costing, and (b) absorption costing Explain why operating income differs under the two approaches. Manufacturing costs incurred $ 525.000 $ 372,000 Variable: Fixed Marketing costs incurred Variable: Fixed $ 144,800 $ 77.400 Begin by calculating ZB Toys's operating income under (a) variable costing (if a box is not used in the table, leave the box empty, do not select a label or enter a zero) Revenues Vanable marketing costs 1200000 420000 Contribution margin 636200 Operating income 185800 Now calculate ZB Toys's operating income under (b) absorption costing. (If a box is not used in the table, leave the box empty, do not select a label or enter a zero.) Fixed manufacturing costs 297600 Gross margin 482400 260200 Operating income while variable costing Absorption costing treats fixed manufacturing cost as a product cost reats it as a period cost Junits in ending inventory. Under absorption costing, these units have a fixed manufacturing per unit. So the total fixed manufacturing cost in ending inventory under absorption costing, and not expensed as ZB Toys has cost of 5 costing is s Since these costs are inventoried under they would under absorption costing by $ be under costing, operating income is ZB Toys started 2017 with no inventories. During the year, their expected and actual production was 30,000 units, of which they sold 24,000 units at $50 each. Cost data for the year is as follows: D (Click the icon to view the cost data.) Calculate ZB Toys' operating income under (a) variable costing, and (b) absorption costing Explain why operating income differs under the two approaches. Manufacturing costs incurred $ 525.000 $ 372,000 Variable: Fixed Marketing costs incurred Variable: Fixed $ 144,800 $ 77.400 Begin by calculating ZB Toys's operating income under (a) variable costing (if a box is not used in the table, leave the box empty, do not select a label or enter a zero) Revenues Vanable marketing costs 1200000 420000 Contribution margin 636200 Operating income 185800 Now calculate ZB Toys's operating income under (b) absorption costing. (If a box is not used in the table, leave the box empty, do not select a label or enter a zero.) Fixed manufacturing costs 297600 Gross margin 482400 260200 Operating income while variable costing Absorption costing treats fixed manufacturing cost as a product cost reats it as a period cost Junits in ending inventory. Under absorption costing, these units have a fixed manufacturing per unit. So the total fixed manufacturing cost in ending inventory under absorption costing, and not expensed as ZB Toys has cost of 5 costing is s Since these costs are inventoried under they would under absorption costing by $ be under costing, operating income is

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