Craig Company has per-unit fixed and variable manufacturing costs of $40 and $15, respectively. Variable selling and administrative costs are $9 per unit. Consider the two independent cases that follow for the firm.
Case A: Variable-costing income, $110,000; sales, 6,000 units; production, 6,000 units
Case B: Variable-costing income, $178,000; sales, 7,500 units; production, 7,100 units
Required:
A. From a product-costing perspective, what is the basic difference between absorption costing and variable costing?

B. Compute Craig's absorption-costing income in Case
C. Compute Craig's absorption-costing income in Case

Question

Craig Company has per-unit fixed and variable manufacturing costs of $40 and $15, respectively. Variable selling and administrative costs are $9 per unit. Consider the two independent cases that follow for the firm.
Case A: Variable-costing income, $110,000; sales, 6,000 units; production, 6,000 units
Case B: Variable-costing income, $178,000; sales, 7,500 units; production, 7,100 units
Required: 
A. From a product-costing perspective, what is the basic difference between absorption costing and variable costing?
 
B. Compute Craig's absorption-costing income in Case
C. Compute Craig's absorption-costing income in Case

Quizplus · Accepted Answer

The Answer of Craig Company has per-unit fixed and variable manufacturing costs of $40 and $15, respectively. Variable selling and administrative costs are $9 per unit. Consider the two independent cases that follow for the firm.
Case A: Variable-costing income, $110,000; sales, 6,000 units; production, 6,000 units
Case B: Variable-costing income, $178,000; sales, 7,500 units; production, 7,100 units
Required: 
A. From a product-costing perspective, what is the basic difference between absorption costing and variable costing?
 
B. Compute Craig's absorption-costing income in Case
C. Compute Craig's absorption-costing income in Case

Craig Company Has Per-Unit Fixed and Variable Manufacturing Costs of $40