Operating income is higher under variable or absorption cost

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Reference no: EM13330169

The masks sell for $17.00. Budgeted fixed manufacturing overhead for the most recent year was $396,000. Actual production was equal to planned production. Required: Under each of the following conditions, state (a) whether operating income is higher under variable or absorption costing and (b) the amount of the difference in reported operating income under the two methods. Treat each condition as an independent case.
1. Production 110,000 units
Sales 107,000 units
2. Production 88,000 units
Sales 93,000 units
3. Production 80,100 units
Sales 80,100 units

Reference no: EM13330169

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