1. Howley Company has the following information for April:

Sales $912,000

VC of goods sold 474,000

FC mfg. 82,000

VC selling & adm. 238,000

FC selling & adm. 54,700

Determine:

1. The Manufacturing Margin
2. The Contribution Margin
3. Operating Income for Howley during the month of April.

2. FC Mfg. $44/unit

VC Mfg. $100/unit

Production 67,200 units

Sales 50,400

Determine:

1. Whether Variable Costing operating income is less than or greater than Absorption Costing operating income.

2. The value difference of in Operating Income when using Variable Costing as opposed to Absorption Costing.

3. Beginning Inventory 52,500 units

Beginning Inventory Costs:

Fixed Mfg. Costs $14.70/unit

Variable Mfg. Costs $30.00/unit

During the month of April, all the beginning inventory units were sold as well as all the

units that were manufactured during April.

Determine:

1. Whether Variable Costing operating income is less than or greater than Absorption Costing operating income.

2. The value difference of in Operating Income when using Variable Costing as opposed to Absorption Costing.

4. VC Mfg. $126/unit

FC Mfg. $157,500

Sales estimate 10,000 units

Determine:

1. How much would Absorption Costing Operating Income differ between a plan to produce 10,000 units and a plan to produce 15,000 units?

b. How much would Variable Costing Operating Income differ between the two production plans.