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Jasper Enterprises had the following cost and production information for April:
| | | | | |
| Units Produced | | | | 20,000 |
| Units Sold | | | | 16,000 |
| Unit Sales Price | | | $ | 210 |
| Manufacturing Cost Per Unit | | | | |
| Direct Material | | | $ | 20 |
| Direct Labor | | | $ | 35 |
| Variable Manufacturing Overhead | | | $ | 16 |
| Fixed Manufacturing Overhead | ($460,000/20,000) | = | $ | 23 |
| Full Manufacturing Cost Per Unit | | | $ | 94 |
| Nonmanufacturing Costs | | | | |
| Variable Selling Expenses | | | $ | 106,000 |
| Fixed General and Administrative Costs | | | $ | 67,000 |
| |
How much greater will Jasper Enterprises' income be under absorption costing than under variable costing?
Multiple Choice
-
$388,800
-
$92,000
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$460,000
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$368,000
Answer & Explanation
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