The inventory ledger account of Yim Inc. shows that the level of inventory of the manufactured product has decreased by 10,000 units over the period. Yim provided the following unit cost information for its manufacturing and non-manufacturing costs: Cost Information for Manufacturing and Non-Manufacturing Costs Costs Variable Fixed Manufacturing costs per unit $12.50 $5.60 Selling and administrative costs per unit $5.00 $2.00 Which of the following statements is true? Group of answer choices Net income under variable costing will be $76,000 more than under variable costing. Net income under absorption costing will be $56,000 more than the net income under variable costing. The difference in net income cannot be determined. Net income under absorption costing will be $56,000 less than net income under variable costing.
The inventory ledger account of Yim Inc. shows that the level of inventory of the manufactured product has decreased by 10,000 units over the period. Yim provided the following unit cost information for its manufacturing and non-manufacturing costs: Cost Information for Manufacturing and Non-Manufacturing Costs Costs Variable Fixed Manufacturing costs per unit $12.50 $5.60 Selling and administrative costs per unit $5.00 $2.00 Which of the following statements is true? Group of answer choices Net income under variable costing will be $76,000 more than under variable costing. Net income under absorption costing will be $56,000 more than the net income under variable costing. The difference in net income cannot be determined. Net income under absorption costing will be $56,000 less than net income under variable costing.
Chapter10: Inventory
Section: Chapter Questions
Problem 1PB: When prices are falling (deflation), which costing method would produce the highest gross margin for...
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Question
The inventory ledger account of Yim Inc. shows that the level of inventory of the manufactured product has decreased by 10,000 units over the period. Yim provided the following unit cost information for its manufacturing and non-
| Costs | Variable | Fixed |
|---|---|---|
| Manufacturing costs per unit | $12.50 | $5.60 |
| Selling and administrative costs per unit | $5.00 | $2.00 |
Which of the following statements is true?
Group of answer choices
Net income under variable costing will be $76,000 more than under variable costing.
Net income under absorption costing will be $56,000 more than the net income under variable costing.
The difference in net income cannot be determined.
Net income under absorption costing will be $56,000 less than net income under variable costing.
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