Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $14 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $33,500 Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The absorption costing method provided more net income by $fill in the blank 4 .
Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $14 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $33,500 Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The absorption costing method provided more net income by $fill in the blank 4 .
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 13PB: Submarine Company produces only one product and sells that product for $150 per unit. Cost...
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Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows:
Direct Material | $14 | per Unit |
Direct Labor | $26 | per Unit |
Variable |
$6 | per Unit |
Fixed Overhead | $33,500 |
Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory.
A. Compute net income under
i. Absorption Costing $fill in the blank 1
ii. Variable Costing $fill in the blank 2
B. Which costing method provide higher net income? By how much?
The absorption costing method provided more net income by $fill in the blank 4 .
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