Analyzing Income under Absorption and Variable Costing Variable manufacturing co

Question

Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $74 per unit, and fixed manufacturing costs are $79,200. Sales are estimated to be 3,500 units If an amount is zero, enter "O". 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 3,500 units and a plan to produce 4,400 units? b. How much would variable costing income from operations differ between the two production plans?

Explanation / Answer

(a) 79,200/4400=18      4400-3500=900   18*900=16200

(b) Zero , In variable costing there is no difference due to production plan. The income will remain same

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