Bacon Mfg. has provided the following information. Units produced Units sold Selling price per unit Total Manufacturing Costs: Variable Fixed I Total Selling and Administration Variable Fixed 2020 1,000 825 $20.00 2,000 3,000 825 3,000 2021 1,000 875 $20.00 2,000 3,000 875 3,000 What is the difference in operating income between absorption and variable costing for 2021? a. Absorption income is $1,250 greater than variable income. b. Absorption income is $1,250 less than variable income. C. Absorption income is $375 greater than variable income. d. Absorption income is $2,125 greater than variable income.
Bacon Mfg. has provided the following information. Units produced Units sold Selling price per unit Total Manufacturing Costs: Variable Fixed I Total Selling and Administration Variable Fixed 2020 1,000 825 $20.00 2,000 3,000 825 3,000 2021 1,000 875 $20.00 2,000 3,000 875 3,000 What is the difference in operating income between absorption and variable costing for 2021? a. Absorption income is $1,250 greater than variable income. b. Absorption income is $1,250 less than variable income. C. Absorption income is $375 greater than variable income. d. Absorption income is $2,125 greater than variable income.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 4BE
Related questions
Question
![Bacon Mfg. has provided the following information.
Units produced
Units sold
Selling price per unit
Total Manufacturing Costs:
Variable
Fixed
I
Total Selling and Administration
Variable
Fixed
2020
1,000
825
$20.00
2,000
3,000
825
3,000
2021
1,000
875
$20.00
2,000
3,000
875
3,000
What is the difference in operating income between absorption and variable
costing for 2021?
a. Absorption income is $1,250 greater than variable income.
b. Absorption income is $1,250 less than variable income.
C. Absorption income is $375 greater than variable income.
d. Absorption income is $2,125 greater than variable income.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff739840e-8dde-49d0-9a03-b6c179107001%2F29eb4551-a46f-4773-86a3-b4ace4524862%2F2iqc4uw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bacon Mfg. has provided the following information.
Units produced
Units sold
Selling price per unit
Total Manufacturing Costs:
Variable
Fixed
I
Total Selling and Administration
Variable
Fixed
2020
1,000
825
$20.00
2,000
3,000
825
3,000
2021
1,000
875
$20.00
2,000
3,000
875
3,000
What is the difference in operating income between absorption and variable
costing for 2021?
a. Absorption income is $1,250 greater than variable income.
b. Absorption income is $1,250 less than variable income.
C. Absorption income is $375 greater than variable income.
d. Absorption income is $2,125 greater than variable income.
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