Variable and Absorption Costing Chandler Company sells its product for $108 per unit. Variable manufacturing costs per unit are $49, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $17 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory for the year. During the year, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Fixed Costs Answer Less: Ending Inventory Answer Cost of Goods Sold Answer Answer Answer Answer Answer Administrative expense Answer Net Income Answer Variable Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Answer Answer Variable cost of goods sold Answer Answer Answer Answer Answer Fixed costs: Answer Answer Administrative Expense Answer Total Fixed Cost Answer Net Income Answer

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...

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Variable and Absorption Costing
Chandler Company sells its product for $108 per unit. Variable manufacturing costs per unit are $49, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $17 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory for the year. During the year, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company be higher if calculated using variable costing or using absorption costing?

Calculate reported income using each method.
Do not use negative signs with any answers.

Absorption Costing Income Statement
Sales		Answer
Cost of Goods Sold:
Beginning Inventory	Answer
Variable Costs	Answer
Fixed Costs	Answer
Less: Ending Inventory	Answer
Cost of Goods Sold		Answer
Answer		Answer
Answer		Answer
Administrative expense		Answer
Net Income		Answer

Variable Costing Income Statement
Sales		Answer
Cost of Goods Sold:
Beginning Inventory	Answer
Variable Costs	Answer
Answer	Answer
Variable cost of goods sold		Answer
Answer		Answer
Answer		Answer
Fixed costs:
Answer	Answer
Administrative Expense	Answer
Total Fixed Cost		Answer
Net Income		Answer

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