One possible way of determining the difference between absorption and variable costing based operating income is to
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to add fixed manufacturing cost to the variable costing based operating income
by subtracting the variable overhead rate from the fixed overhead rate and then multiplying the difference by the number of units in ending inventory
by subtracting the $ amount of fixed manufacturing overhead in beginning inventory from the $ amount of fixed manufacturing overhead in ending inventoryby multiplying the number of units produced by the budgeted fixed manufacturing overhead rate
Related Book For
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
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