Variable and Absorption Costing Grant Company sells its product for $57 per unit. Variable manufacturing costs per unit are $35, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $5 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $40 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales $Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Fixed Costs Answer Less: Ending Inventory Answer Cost of Goods Sold Answer Answer Answer Answer Answer Administrative expense Answer Net Income $Answer Variable Costing Income Statement Sales $Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Answer Answer Variable cost of goods sold Answer Answer Answer Answer Answer Fixed costs: Answer Answer Administrative Expense Answer Total Fixed Cost Answer Net Income $Answer

Variable and Absorption Costing Grant Company sells its product for $57 per unit. Variable manufacturing costs per unit are $35, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $5 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $40 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption costing income statement Sales 1,140,000 Cost of Goods Sold: Beginning Inventory 280,000 Variable Costs 630,000 Fixed Costs Less: Ending Inventory Cost of Goods Sold Manufacturing cost 90,000 155,000 Administrative expense