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BE 21-4 Analyzing income under absorption and variable costing. Variable manufacturing costs are $126 per unit, and fixed manufacturing costs are $160,000. Sales are estimated
BE 21-4 Analyzing income under absorption and variable costing. Variable manufacturing costs are $126 per unit, and fixed manufacturing costs are $160,000. Sales are estimated to be 20,000 units. a. How much would absorption costing operating income differ between a plan to produce 20,000 units and a plan to produce 25,000 units? b. How much would variable costing operating income differ between the two production plans?Instructions 1. Prepare an income statement based on the absorption costing concept. 2. Prepare an income statement based on the variable costing concept. 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2)
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