Question: Please help me! Will rate ASAP!!!! Help!! Accounting - please be correct Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All

Please help me! Will rate ASAP!!!! Help!! Accounting - please be correct

Absorption Statement

Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold.

Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31
Sales $1,360,000
Cost of goods sold:
Cost of goods manufactured $840,000
Ending inventory (126,000)
Total cost of goods sold (714,000)
Gross profit $646,000
Selling and administrative expenses (303,000)
Operating income $343,000

Variable Statement

Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin.

Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31
Sales $1,360,000
Variable cost of goods sold:
Variable cost of goods manufactured $600,000
Ending inventory (90,000)
Total variable cost of goods sold (510,000)
Manufacturing margin $850,000
Variable selling and administrative expenses (238,000)
Contribution margin $612,000
Fixed costs:
Fixed manufacturing costs $240,000
Fixed selling and administrative expenses 65,000
Total fixed costs (305,000)
Operating income $307,000

Please help me! Will rate ASAP!!!! Help!! Accounting - please be correct

making situation should be carefully analyzed in deciding whether absorption or variable costing reporting would be more useful. All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs. follow. If the answer is zero, enter " 0 ". information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels 2. What is the change in operating income from producing 10,000 additional units under absorption costing? 3. What is the change in operating income from producing 10,000 additional units under variable costing? 4. What would be your recommendation to the production manager? obsolescence costs. b. Produce the extra 10,000 units. Operating income will be increased, and the production manager will receive praise for creating higher profits. c. Do not produce the extra 10,000 units. Operating income does not change under absorption costing when the additional units are produced. d. Produce the extra 10,000 units. It's always a good idea to have extra units on hand and keep the factory operating at capacity, even if all the units are not sold. making situation should be carefully analyzed in deciding whether absorption or variable costing reporting would be more useful. All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs. follow. If the answer is zero, enter " 0 ". information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels 2. What is the change in operating income from producing 10,000 additional units under absorption costing? 3. What is the change in operating income from producing 10,000 additional units under variable costing? 4. What would be your recommendation to the production manager? obsolescence costs. b. Produce the extra 10,000 units. Operating income will be increased, and the production manager will receive praise for creating higher profits. c. Do not produce the extra 10,000 units. Operating income does not change under absorption costing when the additional units are produced. d. Produce the extra 10,000 units. It's always a good idea to have extra units on hand and keep the factory operating at capacity, even if all the units are not sold

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