The following data were taken from records of the Kitchen Juicer Company. The company uses variable costing.
Question:
Units produced: 40,000
Units sold: 37,500
Variable cost per unit:
Direct material................... $48
Direct labor...................... 27
Variable overhead............... 14
Variable selling costs............ 12
Fixed costs:
Selling and administrative........ $750,000
Manufacturing..................... 500,000
How much higher (or lower) would the company's first-year net income have been if the company had used absorption costing rather than variable costing? Show computations.
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Related Book For
Cost Accounting Traditions and Innovations
ISBN: 978-0324026450
4th edition
Authors: Barfield Jesse, Raiborn Cecily, Kinney Michael
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