1.Explain the difference between variable and full costing.
2.Explain why income calculated under full absorption costingwill be greater than income calculated under variable costing whenproduction exceeds sales. Explain how a manufacturing company can"bury" fixed manufacturing costs in ending inventory under fullabsorption costing.
3.If the fixed manufacturing overhead cost per unit under fullcosting is multiplied by the change in inventory between thebeginning and ending of the period, what does the resulting numberrepresent?
1.Explain the difference between variable and full costing.
2.Explain why income calculated under full absorption costingwill be greater than income calculated under variable costing whenproduction exceeds sales. Explain how a manufacturing company can"bury" fixed manufacturing costs in ending inventory under fullabsorption costing.
3.If the fixed manufacturing overhead cost per unit under fullcosting is multiplied by the change in inventory between thebeginning and ending of the period, what does the resulting numberrepresent?
Related questions
The following information relates to Dorian Industrial forfiscal 2014, the companyâs first year of operation:
| units produced | 421000 |
| units sold | 406300 |
| selling price per unit | 49 |
| direct materialper unit | 16 |
| direct labor per unit | 6 |
| variable manufacturing OH per unit | 2 |
| variable selling cost per unit | .03 |
| annual fixed manufacturing OH | 84200 |
| annual fixed selling expense | 28300 |
| annual fixed administrative expense | 105000 |
Prepare an income statement using full costing
Prepare an income statement using variable costing
Calculate the amount of fixed manufacturing overhead that willbe included in ending inventory under full costing and reconcile itto the difference between income computed under variable and fullcosting
