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  3. 16. at xlt inc., variable costs are $80 per unit,

16. At XLT Inc., variable costs are $80 per unit, and fixed costs are $40,000....

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Accounting

16. At XLT Inc., variable costs are $80 per unit, and fixed costs are $40,000. Sales are estimated to be 4,000 units.

a. How much would absorption costing operating income differ between a plan to produce 8,000 units and a plan to produce 10,000 units?

b. How much would variable costing operating income differ between the two production plans?

17. On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

Units

Production

50,000

Sales ($18 per unit)

(42,000)

Inventory, January 31

8,000

Manufacturing costs:

Variable

$575,000

Fixed

80,000

Total

$655,000

Selling and administrative expenses:

Variable

$ 35,000

Fixed

10,500

Total

$ 45,500

a.

Prepare an income statement using absorption costing.

b.

Prepare an income statement using variable costing.

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