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30 Sep 2018

6-7 If the units produced exceed unit sales, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

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Keith Leannon
Keith LeannonLv2
3 Oct 2018

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Related questions

6–6 If the units produced and unit sales are equal, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

6-4 What arguments in favor of treating fixed manufacturingoverhead costs as product costs?

6-6 If the units produced and unit sales are equal, which methodwould you expet to show the higer operating income, variablecosting or absorption costing? Why?

6-7 If the units produced exceed unit sales, which method wouldyou expect to show the higher net operating income, variablecosting or absorptioncosting? Why?

6-8 If fixed manufacturing overhead costs are relaesed frominventory under absorption costing, what does this tell you aboutthe level of production in relation to the level of sales?

6-9 Under absorption costing, how is it possible to increase netoperating income without increasing sales?

Crossbow Corp. produces a single product. Data concerning June's operations follow: Units in beginning inventory 0 Units produced 6,000 Units sold 5,000 Variable costs per unit: Manufacturing $ 7 Selling and administrative $ 3 Fixed costs in total: Manufacturing $12,000 Selling and administrative $ 3,000 For the year in question, net operating income under variable costing will be: higher than net operating income under absorption costing. lower than net operating income under absorption costing. the same as net operating income under absorption costing. The relation between absorption costing and variable costing net operating income cannot be determined.

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