COMM 305 Lecture 1: comm 305 note3
25 Jan 2015
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* there is no ending inventory so fixed costs are not deferred into the future. Comparison of net income under the two approaches. If a company produces more units than it sells in a period, net operating income under variable costing will: be the same as it would be under absorption costing. be less than it would be under absorption costing. be equal to the net operating income using absorption costing plus selling and administrative costs. be equal to the net operating income using absorption costing less fixed manufacturing costs. The production volume variance under the normal costing method is calculated as: the difference between actual production from budgeted production. the sum of budgeted fixed manufacturing overhead costs and allocated fixed manufacturing overhead costs. the difference between budgeted fixed manufacturing overhead costs and actual fixed manufacturing overhead costs. the difference between actual fixed manufacturing overhead costs and assigned fixed manufacturing overhead costs.
