You obtain the following information regarding fixed production costs from a manufacturing firm for fiscal year 2021: Fixed costs in the beginning inventory - P16,000 Fixed costs incurred this period - P100,000 Which of the following statements is not true: Using variable costing, this firm will deduct no more than P16,000 for fixed production costs. The maximum difference between this firm’s 2021 income based on absorption costing and its income based on variable costing is P16,000. The maximum amount of fixed production costs that this firm could deduct using absorption costs in 2021 is P116,000. If this firm produced substantially more units than it sold in 2021, variable costing will probably yield a lower income than absorption costing.
You obtain the following information regarding fixed production costs from a manufacturing firm for fiscal year 2021: Fixed costs in the beginning inventory - P16,000 Fixed costs incurred this period - P100,000 Which of the following statements is not true: Using variable costing, this firm will deduct no more than P16,000 for fixed production costs. The maximum difference between this firm’s 2021 income based on absorption costing and its income based on variable costing is P16,000. The maximum amount of fixed production costs that this firm could deduct using absorption costs in 2021 is P116,000. If this firm produced substantially more units than it sold in 2021, variable costing will probably yield a lower income than absorption costing.
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 28P: The following information pertains to Vladamir, Inc., for last year: There are no work-in-process...
Related questions
Question
You obtain the following information regarding fixed production costs from a manufacturing firm for fiscal year 2021:
Fixed costs in the beginning inventory - P16,000
Fixed costs incurred this period - P100,000
Which of the following statements is not true:
- Using variable costing, this firm will deduct no more than P16,000 for fixed production costs.
- The maximum difference between this firm’s 2021 income based on absorption costing and its income based on variable costing is P16,000.
- The maximum amount of fixed production costs that this firm could deduct using absorption costs in 2021 is P116,000.
- If this firm produced substantially more units than it sold in 2021, variable costing will probably yield a lower income than absorption costing.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College