With reference to the information given above, complete the following: Mabotsana’s Limited’s absorption costing net income...

With reference to the information given above, complete the following: Mabotsana’s Limited’s absorption costing net income for October 2019 would be ______________ variable costing net income. (2)

a. R150 000 greater than

b. R150 000 less than

c. R240 000 less than

d. R240 000 greater than

The following information relates to questions 4 and 5: The following information was taken from the production records of Mabotsana Limited for October 2019: Opening inventory 1 000 units Closing inventory 6 000 units Direct labour cost per unit R40 Direct material cost per unit R20 Variable manufacturing overhead costs per unit R10 Fixed manufacturing overhead costs per unit R30 Variable selling and administrative costs per unit R6 Fixed selling and administrative costs per unit R14

Expert Solution

a. R150000 greater than

Under variable costing Inventory is valued taking only variable production cost.

But under absorption costing inventory is valued taking both variable and fixed production cost. So naturally value of inventory under absorption costing will be higher.

ekkarill92 answered 2 years ago

Calculation of absorption costing net operating income

Helmers Corporation manufactures a single product. Variable costing net operating income last year was $86,000 and this year was $103,000. Last year, $32,000 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year?

2.When does absorption costing net operating income and variable costing net operating income require reconciliation? Explain...

2.When does absorption costing net operating income and variable costing net operating income require reconciliation? Explain different situations with appropriate reasons behind such changes.

Which of the following situations would cause variable costing net income to be higher than absorption...

Which of the following situations would cause variable costing net income to be higher than absorption costing net income? Units produced and sold were equal, units produced exceeded units sold, units sold exceeded units produced, or units sold were less than units produced

a) Prepare both an Absorption & Variable Costing Income Statement, given the following: (Provide computations or...

a) Prepare both an Absorption & Variable Costing Income Statement, given the following: (Provide computations or excel attachment) Total units= 85,000 kg Consumer Price (including VAT): 148.20, Value Added Tax (25% of consumer price before tax): 29.64, Consumer Price before tax: 118.56, Retailer's Margin (27.5% of price to retailer): 25.57, UNIT PRICE to Retailer: 92.99 Cake Material: 10.67, Cake Labor: 10.25, Toppings Material: 5.55, Toppings Labor: Cabbage: 5.45, Packaging: 10.26, Transportation & Storage: 6.20, Margins & Discounts to Wholesalers (8%...

Complete the multi product contribution margin income statement with the given information: Net income earned during...

Complete the multi product contribution margin income statement with the given information: Net income earned during most recent period: $ 65,000 Contribution margin ratio: 15% Fixed costs incurred during most recent period: $ 175,000 Statutory tax rate: 37% Operating income generated at breakeven: $ - Applicable to the Football Division Selling price per football $ 18.00 Total variable cost dollars incurred by Football Division $ 952,088 Quantity of footballs sold during most recent period: 64,000 Applicable to the Baseball...

1. Determine the following information using absorption costing and variable costing: Absorption costing a. Manufacturing cost...

1. Determine the following information using absorption costing and variable costing: Absorption costing a. Manufacturing cost _______________ b. Per-unit cost _______________ c. Cost of ending inventory _______________ Variable costing a. Manufacturing cost _______________ b. Per-unit cost _______________ c. Cost of ending inventory _______________ Basic facts: Direct materials $1,000 Direct labor $2,000 Variable overhead $1,500 Fixed overhead $1,000 Units produced 100 Units sold 80 No beginning inventory 2. What is the prime cost per unit and conversion cost per unit: a....

The value of Mabotsana’s Limited’s closing inventory for October 2019 using the absorption costing method is:...

The value of Mabotsana’s Limited’s closing inventory for October 2019 using the absorption costing method is: (2) a. R240 000 b. R360 000 c. R600 000 d. R420 000 The following information was taken from the production records of Mabotsana Limited for October 2019: Opening inventory 1 000 units Closing inventory 6 000 units Direct labour cost per unit R40 Direct material cost per unit R20 Variable manufacturing overhead costs per unit R10 Fixed manufacturing overhead costs per unit R30...

A. The Contribution Margin Income Statement has a higher Net Operating Income than the Absorption Costing...

A. The Contribution Margin Income Statement has a higher Net Operating Income than the Absorption Costing Income Statement: true or false B. The horizontal line on the CVP Graph represents what one? fixed costs total revenue total expenses Variable Cost

****Please type out the answer. Compute net operating income under absorption costing based on the following...

****Please type out the answer. Compute net operating income under absorption costing based on the following data. Unit cost for direct materials $10 Unit cost for direct labor 15 Unit cost for variable manufacturing overhead 7 Unit variable selling and administrative expense 2 Total fixed manufacturing overhead $100,000 Total fixed selling and administrative expense 80,000 Units in beginning inventory 0 Units produced 25,000 Units sold 22,000 Unit selling price $70

Sprinkles Company: a) Prepare both an Absorption & Variable Costing Income Statement, given the following: (Provide...

Sprinkles Company: a) Prepare both an Absorption & Variable Costing Income Statement, given the following: (Provide computations or excel attachment) Total units= 85,000 kg Consumer Price (including VAT): 148.20, Value Added Tax (25% of consumer price before tax): 29.64, Consumer Price before tax: 118.56, Retailer's Margin (27.5% of price to retailer): 25.57, UNIT PRICE to Retailer: 92.99 Cake Material: 10.67, Cake Labor: 10.25, Toppings Material: 5.55, Toppings Labor: Cabbage: 5.45, Packaging: 10.26, Transportation & Storage: 6.20, Margins & Discounts to...

Question