Question
TANNER Companys planned production for the year just ended was 200,000 units. This production level was achieved, and 150,000 units were sold. Other data follows:
TANNER Companys planned production for the year just ended was 200,000 units. This production level was achieved, and 150,000 units were sold. Other data follows:
Direct Material Used... $800,000
Direct Labor Incurred.. 400,000
Fixed Manufacturing Overhead... 600,000
Variable Manufacturing Overhead.. 240,000
Fixed Selling and Administrative Expenses.... 700,000
Variable Selling and Administrative Expenses... 90,000
Finished-goods Inventory, January 1.. 30,000 units
There were no work-in-process inventories at the beginning or end of the year.
Required:
By what amount is the operating income of VARIABLE costing lower than that of ABSORPTION costing for the year?
| A. | $600,000 | |
| B. | $200,000 | |
| C. | None of the other answers | |
| D. | $300,000 | |
| E. | $150,000 | |
| F. | $90,000 | |
| G. | $250,000 | |
| H. | $0 |
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Financial Accounting A Practical Introduction
Authors: Ilias Basioudis
1st Edition
0273714295, 978-0273714293
