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Break Even Corp has the following info: 2019 2020 Beginning Inventory (in units) 20 10 Actual Sales (in units) 400 405 Budgeted production (in
Break Even Corp has the following info: 2019 2020 Beginning Inventory (in units) 20 10 Actual Sales (in units) 400 405 Budgeted production (in units) 400 410 Budgeted fixed manufacturing costs (in $) 8,000 8,610 Operating Income using Variable Costing (in $) $ 0 $ 0 In 2018, budgeted manufacturing costs were $55.50 per unit ($35.00 variable and $20.50 fixed costs). In all years, budgeted fixed manufacturing costs = actual fixed manufacturing costs Requireed: 1. 2. 3. 4. What is net income (loss) using absorption costing for 2019 How much more (less) net income would be generated based on Variable Costing if an additional unit was produced in 2020. How much more (less) net income would be generated based on Absorption Costing if an additional unit was produced in 2020. Why would the production manager want to produce extra units if Absorption Costing was used in 2020, even if it is likely that the additional units will be excess of market demand and will never be sold.
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