20 Tixed overbead 15330,000/33,000 units Total product coet per unle Pert 2 ef2
ID: 2817852 • Letter: 2
Question
20 Tixed overbead 15330,000/33,000 units Total product coet per unle Pert 2 ef2 e. Selling and administrative expenses consist of the following Variable salling and adeiniatrative experaes152-25 per unit) Pixed selling and adniniatrative expenses Total selling and adniniatrative axpenaes 2017 51,350 9,750 245-800245 000 2 what are the differences between the absorption costing inoome and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.) Reconeiliation of Variable Casting income to Absorption Costing Inoome Absorption costing income loes)
Explanation / Answer
The concept here is that in absorption costing approach we take the full cost of a product which also includes the Fixed cost. However in variable costing method we only take the variable costs to calculate the cost of product.
However to solve this question more info is required. Although i am giving my answer only considering the information available.
As per absorption Costing the Total cost would include all the above Cost including the Fixed cost.
Product cost = 33000*31 = 1023000( For 2016)
Product cost = 33000*31 = 1023000( For 2017)
Total cost for 2016 = 1023000 + 296750 = 1319750
Total cost for 2017 = 1023000 + 341750 = 1364750
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