Analyzing Income under Absorption and Variable Costing Variable manufacturing co

Question

Analyzing Income under Absorption and Variable Costing

Variable manufacturing costs are $97 per unit, and fixed manufacturing costs are $44,800. Sales are estimated to be 4,800 units.

If an amount is zero, enter "0". Do not round interim calculations. Round final answer to nearest whole dollar.

a. How much would absorption costing income from operations differ between a plan to produce 4,800 units and a plan to produce 6,400 units?
$

b. How much would variable costing income from operations differ between the two production plans?
$

Explanation / Answer

a Difference in income from operations = (6400-4800)*(44800/6400)= $11200 b Difference in income from operations = $0

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