Answer the following questions using the information below:
Sharifa Corporation incurred fixed manufacturing costs of $12,000 during 2014. Other information for 2014 includes:
The budgeted denominator level is 2,000 units.
Units produced total 1,500 units.
Units sold total 1,200 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Operating income using absorption costing will be ________ than operating income if using variable costing.
A) $1,800 higher
B) $7,200 lower
C) $4,800 higher
D) $4,800 lower

Question

Quizplus · Accepted Answer

The Answer of Answer the following questions using the information below:
Sharifa Corporation incurred fixed manufacturing costs of $12,000 during 2014. Other information for 2014 includes:
The budgeted denominator level is 2,000 units.
Units produced total 1,500 units.
Units sold total 1,200 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
-Operating income using absorption costing will be ________ than operating income if using variable costing.
A) $1,800 higher
B) $7,200 lower
C) $4,800 higher
D) $4,800 lower

Answer the Following Questions Using the Information Below