Absorption and Variable Costing Comparisons: Production Equals Sales Assume that Smuckers manufactures and sells 30,000 cases of peanut butter each quarter. The following data are available for the third quarter of 2017 Total fixed manufacturing overhead $180,000 Fored selling and administrative 20,000 Sales price per case 35 Direct materials per case 18 Direct labor per case 9 Variable manufacturing overhead percase 3 Required a. Compute the cost per case under both absorption costing and variable costing, Absorption $ 36.67 X Variable S 38 X b. Compute net income under both absorption costing and variable costing Do not use a negative sign with your answers SMUCKERS Absorption Costing Income Statement For the Third Quarter of 2017 Sales $ 1,140,000 Cost of goods sold . 540,000 X Contribution margin X 90,000 X Gross profit X 180,000 X Net income $ 30,000 x SMUCKERS Variable Costing Income Statement For the Third Quarter of 2017 Sales Contribution margin Contribution margin . Fored expenses Cost of goods sold X 180,000 Selling and administrative 20.000 Net income 5 1.140,000 900,000 240,000 200,000 40,000 $