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Grainger Company produces only one product and sells that product for $100 per unit. Cost information...

Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is as follows:

Direct Material $14 per Unit
Direct Labor $24 per Unit
Variable Overhead $4 per Unit
Fixed Overhead $34,000

Selling expenses are $3 per unit and are all variable. Administrative expenses of $15,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory.

A. Compute net income under

i. Absorption Costing

ii. Variable Costing   

B. Which costing method provides higher net income? By how much?

The absorption costing method provided more net income by $

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ekkarill92 answered 10 months ago
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