BBUS 2541 Study Guide - Total Absorption Costing, Variable Cost, Net Income
Document Summary
Cost per unit produced = ,000/20,000 units = . 50 per unit. Difference in fixed overhead expensed under absorption and variable costing change in inventory in units ned predetermi fixed overhead rate (1,000 units) (. 50 per unit) Since inventory decreased during the year, income reported under absorption costing will be ,500 lower than income reported under variable costing. Cost per unit produced = ,000/10,000 units = . 40 per unit. Difference in fixed overhead expensed under absorption and variable costing change in inventory in units ned predetermi fixed overhead rate (1,000 units) (. 00 per unit) Since inventory increased during the year, income reported under absorption costing will be ,000 higher than income reported under variable costing. 2010 mcgraw-hill ryerson (cid:247) (cid:247) (cid:247) (cid:246) (cid:231) (cid:231) (cid:231) (cid:230) (cid:247) (cid:247) (cid:247) (cid:246) (cid:231) (cid:231) (cid:231) (cid:230) Since there were no variances in 20x4, actual production and budgeted production must have been the same. Predetermined fixed overhead rate budgeted fixed overhead budgeted production.
