In the current year, TGIT Corp. produced 10,000 units and sold 8,000 of the units. The company incurred the following costs: $120,000 Direct materials used Direct labour cost 68,000 n Variable manufacturing overhead 40,000 Fixed manufacturing overhead 60,000 Fixed selling and admin. expense 45,000 Variable selling and admin. expense 36,000 There was no beginning finished goods inventory and no beginning or ending work-in-process inventory. Use the information provided to answer the following questions: a) Without doing any calculations, would net income be higher for the year under absorption costing or under variable costing? Absorption Costing - b) What is the product cost per unit? Under variable costing? Absorption Costing - b) What is the product cost per unit? Under variable costing? $ 22.8 per unit Under absorption costing? $ 28.8 per unit c) Would net income be higher for the year under absorption costing or under variable costing? Absorption Costing - And by what amount? $ 60000 *****************d) starts a new scenario with some of the data changing from the scenario in a d) Would both of your answers in b) be the same if you were told that on January 1, TGIT had 1,000 units in finished goods inventory with the same cost per unit? (HINT - reconcile beginning and ending inventory with this new scenario) No e) If you were told that TGIT produced 10,000 units and sold 9,000 units, what is the product cost per unit? Under Variable costing? $ 22.8 per unit Under absorption costing? $ 28.8 per unit f) Would net income be higher for the year under absorption costing or under variable costing? Absorption Costing And by what amount? $ 60000 g) If TGIT produced 8,000 units and sold 8,000 units, what is the product cost per unit? HINT: Don't forget how costs behave when answering this question. Under variable costing? $ 28.5 per unit Under absorption costing? $ 36000 per unit h) Would net income be higher for the year under absorption costing or under variable costing? Neither And by what amount? $ 0