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  1. business
  2. accounting
  3. xy company uses actual absorption costing. the ope

XY Company uses actual absorption costing. The operating data follows: Selling Price (per unit) $1000...

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Accounting

XY Company uses actual absorption costing. The operating data follows:

Selling Price (per unit) $1000

Unit Variable Manufacturing Costs 150

Unit Variable Marketing Cost 350

Fixed Manufacturing Costs 400

All costs are on per unit basis. There are no other costs:

Required:

  1. What is the effect on net income if sales goes up by 1 unit with no change in production? *Show with income statement (1 points)
  2. What is the effect on net income if production goes up by 1 unit with no change in sales? *Show with income statement(1 points)
  3. Explain the difference in the effects. (2 point)

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