The level of inventory of a manufactured product has increased by 8,366 units during a period. The following data are also available: Line Item Description Variable Fixed Unit manufacturing costs of the period $14.00 $8.00 Unit operating expenses of the period 2.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a. $100,392 increase b. $66,928 decrease c. $66,928 increase d. $100,392 decrease
The level of inventory of a manufactured product has increased by 8,366 units during a period. The following data are also available: Line Item Description Variable Fixed Unit manufacturing costs of the period $14.00 $8.00 Unit operating expenses of the period 2.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a. $100,392 increase b. $66,928 decrease c. $66,928 increase d. $100,392 decrease
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...
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Question
The level of inventory of a manufactured product has increased by 8,366 units during a period. The following data are also available:
| Line Item Description | Variable | Fixed |
|---|---|---|
| Unit |
$14.00 | $8.00 |
| Unit operating expenses of the period | 2.00 | 4.00 |
The effect on operating income if variable costing is used rather than absorption costing would be a(n)
a. $100,392 increase
b. $66,928 decrease
c. $66,928 increase
d. $100,392 decrease
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