Concept explainers
Submarine Company produces only one product and sells that product for $150 per unit. Cost information for the product is as follows:
Selling expenses are $2 per unit and are all variable. Administrative expenses of $15,000 are all fixed, Submarine produced 2.000 units and sold 1.800. Grainger had no beginning inventory.
A. Compute net income under
- absorption costing
- variable costing
B. Reconcile the difference between the income under absorption and variable costing.
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