Answer the following questions using the information below:
Tunney Corporation incurred fixed manufacturing costs of $7,200 during 2011. Other information for 2011 includes:
The fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Under absorption costing, fixed manufacturing costs expensed on the income statement (excluding adjustments for variances)total:
A)$8,550
B)$9,000
C)$7,200

Question

Answer the following questions using the information below:
Tunney Corporation incurred fixed manufacturing costs of $7,200 during 2011. Other information for 2011 includes:
  The fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Under absorption costing, fixed manufacturing costs expensed on the income statement (excluding adjustments for variances)total:
A)$8,550 
B)$9,000 
C)$7,200

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing costs are expensed on the income statement as part of the cost of goods sold. In this case, the total fixed manufacturing costs expensed on the income statement are $8,550.

Answer the Following Questions Using the Information Below