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Variable and Absorption Costing Chandler Company sells its product for $116 per unit. Variable manufacturing costs per unit are $51, and fixed manufacturing costs at
Variable and Absorption Costing Chandler Company sells its product for $116 per unit. Variable manufacturing costs per unit are $51, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $24 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2016. During 2016, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales $ Cost of Goods Sold: Beginning Inventory Variable Costs Fixed Costs Less: Ending Inventory Cost of Goods Sold Administrative expense Net Income $ Variable Costing Income Statement Sales $ Cost of Goods Sold: Beginning Inventory Variable costs Variable cost of goods sold Fixed costs: e Administrative Expense Total Fixed Cost Net Income $
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