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Using the Given Information, Determine the Income Under Both the Absorption

Question 38

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Using the given information, determine the income under both the absorption and the direct (variable) costing methods for the company for the year. Explain the difference, if any.  Beginning Inventory −0− units Units produced 15,000 Ending Inventory 2,000Sales price per unit $44.00 Variable manufacturing costs per unit 19.00 Variable selling & administrative costs per unit4.00 Fixed manufacturing costs $75000 Fixed selling and administrative costs $79,950\begin{array}{llcc} \text { Beginning Inventory } & -0- \text { units} \\ \text { Units produced } &15,000\\ \text { Ending Inventory } &2,000\\ \text {Sales price per unit } &\$44.00\\ \text { Variable manufacturing costs per unit } &19.00\\ \text { Variable selling \( \& \) administrative costs per unit} &4.00\\ \text { Fixed manufacturing costs } &\$75000\\ \text { Fixed selling and administrative costs } &\$79,950\\\end{array}


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