Venus Corporation incurred fixed manufacturing costs of $4,800 during 2017.Other information for 2017 includes:
The budgeted denominator level is 1,600 units.
Units produced total 770 units.
Units sold total 630 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
Operating income using variable costing will be ________ than operating income if using absorption costing.
A)$2,490 higher
B)$2,490 lower
C)$1,890 higher
D)$420 lower

Question

Venus Corporation incurred fixed manufacturing costs of $4,800 during 2017.Other information for 2017 includes:
The budgeted denominator level is 1,600 units. 
Units produced total 770 units.
Units sold total 630 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
Operating income using variable costing will be ________ than operating income if using absorption costing.
A)$2,490 higher
B)$2,490 lower
C)$1,890 higher
D)$420 lower

Quizplus · Accepted Answer

The Answer of Venus Corporation incurred fixed manufacturing costs of $4,800 during 2017.Other information for 2017 includes:
The budgeted denominator level is 1,600 units. 
Units produced total 770 units.
Units sold total 630 units.
Beginning inventory was zero.
The company uses variable costing and the fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
Operating income using variable costing will be ________ than operating income if using absorption costing.
A)$2,490 higher
B)$2,490 lower
C)$1,890 higher
D)$420 lower

Venus Corporation Incurred Fixed Manufacturing Costs of $4,800 During 2017