Variable and Absorption Costing

Chandler Company sells its product for $$108$ per unit. Variable manufacturing costs per unit are $$49,$ and fixed manufacturing costs at the normal operating level of $12,000$ units are $$240,000.$ Variable selling expenses are $$17$ per unit sold. Fixed administrative expenses total $$104,000.$ Chandler had no beginning inventory for the year. During the year, the company produced $12,000$ units and sold $9,000.$ Would net income for Chandler Company be higher if calculated using variable costing or using absorption costing?

Calculate reported income using each method.

Do not use negative signs with any answers.

Absorption Costing Income Statement

Sales Answer

$0$

Cost of Goods Sold:

Beginning Inventory Answer

$0$

Variable Costs Answer

$0$

Fixed Costs Answer

$0$

Less: Ending Inventory Answer

$0$

Cost of Goods Sold Answer

$0$

Answer

Gross profit

Answer

$0$

Answer

Selling expense

Answer

$0$

Administrative expense Answer

$0$

Net Income Answer

$0$

Variable Costing Income Statement

Sales Answer

$0$

Cost of Goods Sold:

Beginning Inventory Answer

$0$

Variable Costs Answer

$0$

Answer

Answer

$0$

Variable cost of goods sold Answer

$0$

Answer

Answer

$0$

Answer

Answer

$0$

Fixed costs:

Answer

Answer

$0$

Administrative Expense Answer

$0$

Total Fixed Cost Answer

$0$

Net Income Answer

$0$