Stanczyk Inc. started operations in January 2025. The company produces and sells cabinets for $5,200 each. The following information pertains to the cost and sales of the cabinets each year: Variable manufacturing costs $2,300 per unit Variable operating costs $65 per unit Fixed manufacturing costs $25,000 Fixed operating costs $12,000 The company produced 25 units per year for 2025, 2026, and 2027. The company sold 22 units in 2025, 20 units in 2026, and 26 units in 2027. It reported no volume variances for the three-year period. For 2025, Question options: a) the operating income for absorption costing may be greater than, equal to or less than operating income under variable costing. b) the operating income for absorption costing equaled operating income for variable costing. c) variable costing operating income exceeded absorption costing operating income by $3,000. d) absorption costing operating income exceeded variable costing operating income by $3,000.
Stanczyk Inc. started operations in January 2025. The company produces and sells cabinets for $5,200 each. The following information pertains to the cost and sales of the cabinets each year: Variable manufacturing costs $2,300 per unit Variable operating costs $65 per unit Fixed manufacturing costs $25,000 Fixed operating costs $12,000 The company produced 25 units per year for 2025, 2026, and 2027. The company sold 22 units in 2025, 20 units in 2026, and 26 units in 2027. It reported no volume variances for the three-year period. For 2025, Question options: a) the operating income for absorption costing may be greater than, equal to or less than operating income under variable costing. b) the operating income for absorption costing equaled operating income for variable costing. c) variable costing operating income exceeded absorption costing operating income by $3,000. d) absorption costing operating income exceeded variable costing operating income by $3,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Stanczyk Inc. started operations in January 2025. The company produces and sells cabinets for $5,200 each. The following information pertains to the cost and sales of the cabinets each year:
Variable
Variable operating costs $65 per unit
Fixed manufacturing costs $25,000
Fixed operating costs $12,000
The company produced 25 units per year for 2025, 2026, and 2027. The company sold 22 units in 2025, 20 units in 2026, and 26 units in 2027. It reported no volume variances for the three-year period. For 2025,
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