Bianca Bicycle Company manufactures mountain bikes with a variable cost of $2,800. The cost per unit remained the sam current year as in the previous year. The bicycles sell for $3,550 each. Budgeted fixed manufacturing overhead for the yea $12,800,000. Planned and actual production for the year were the same. Required: State whether operating income is higher under variable or absorption costing and the amount of the difference in reportem income under the two methods. Treat each condition as an independent case. Note: Round intermediate calculations to 2 decimal places. Production units Sales Units Income Higher Under (Method) Amount of Difference

Bianca Bicycle Company manufactures mountain bikes with a variable cost of $2,800. The cost per unit remained the sam current year as in the previous year. The bicycles sell for $3,550 each. Budgeted fixed manufacturing overhead for the yea $12,800,000. Planned and actual production for the year were the same. Required: State whether operating income is higher under variable or absorption costing and the amount of the difference in reportem income under the two methods. Treat each condition as an independent case. Note: Round intermediate calculations to 2 decimal places. Production units Sales Units Income Higher Under (Method) Amount of Difference

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...

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