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ratelena [41]
3 years ago
9

Jupiter Corporation incurred fixed manufacturing costs of $18,000 during 2017. Other information for 2017 includes:

Business
1 answer:
Delicious77 [7]3 years ago
3 0

Answer:

Lower by $8,250

Explanation:

The operating income reported will be different as the unit level of inventory increased during the  account period .

Denominator rate:

= Fixed manufacturing costs ÷ Budgeted denominator level

= 18,000 ÷ 2,400

= 7.5

Operative income:

= Total Units produced - (Total units sold × Denominator rate)

= 2,700 - (1,600 × 7.5 )

= 1,100 × 7.5

= $8,250

Lower by $8,250 under the variable costing because 8250 of fixed manufacturing cost remain in  inventory under absorption.

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There will be a difference in the income .

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Increase in units 8000                                                              

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