Sales price P15 per unit
Variable costs:
SG&A P2 per unit
Production P4 per unit
Fixed costs (total cost incurred for the
year):
SG&A P14,000
Production P20,000
During the first year, Sherrill Corporation manufactured 5,000
units and sold 3,800. There was no beginning or ending
work-in-process inventory.
1. How much income before income taxes would be reported if
Stanley uses absorption costing?
2. How much income before income taxes would be reported if
variable costing was used?
3. Show why...