Alliance Tooling produces a single product in its plant. At the beginning of the year, there were no units in inventory. During the year, Alliance produced 120,000 units and sold 100,000 units at $26.75 per unit. Variable manufacturing costs are $13.5 per unit. There is no fixed manufacturing cost. Alliance pays $2.7 per unit for sales commissions and shipping. It has fixed costs of $720,000 for selling and administration. Its tax rate is 40 percent. Which statement is TRUE in this case?<\/p>
Group of answer choices<\/p>
<\/p>
<\/p>
Profit under absorption costing is larger than profit under variable costing by $120,000.<\/p>
<\/p>
Profit under absorption costing is the same as profit under variable costing.<\/p>
<\/p>
Profit under absorption costing is larger than profit under variable costing because the level of inventory increases.<\/p>
<\/p>
Profit under variable costing is larger than profit under absorption costing by $120,000.<\/p>", "transcribed_text": "", "related_book": { "title": "Cost Management Measuring Monitoring And Motivating Performance", "isbn": "1118168879, 9781118168875", "edition": "2nd Canadian Edition", "authors": "Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/635f99b5717e0_1157.jpg", "uri": "\/textbooks\/cost-management-measuring-monitoring-and-motivating-performance-2nd-canadian-edition-1157", "see_more_uri": "" }, "free_related_book": { "isbn": "0415200679", "uri": "\/textbooks\/john-ruskins-political-economy-1st-edition-9780415200677-9781134636549", "name": "John Ruskins Political Economy", "edition": "1st\u00a0Edition" }, "question_posted": "2024-06-29 01:58:33", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/the-diagonal-of-long-triangular-bar-is-well-insulated", "description": "The diagonal of a long triangular bar is well insulated, while sides of equivalent length are maintained at uniform temperatures Ta and Tb. 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