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6. Manta Ray Company manufactures diving masks with a standard variable cost of $25. The masks sell for $34. Budgeted fixed manufacturing overhead for the
6. Manta Ray Company manufactures diving masks with a standard variable cost of $25. The masks sell for $34. Budgeted fixed manufacturing overhead for the most recent year was $792,000. Actual production was equal to planned production. Required: Under each of the following conditions, state (a) whether income is higher under variable or absorption costing and (b) the amount of the different in reported income under the Mo methods. Treat each condition as an independent case. 1. Production ...... 110,000 units Sales .................. 108,000 units 2. Production ...... 90,000 units Sales .................. 95,000 units 3. Production ...... 79,200 units Sales .................. 79,200 units
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