Which of the following formulas can often reconcile the difference between absorption- and variable-costing net income?...
Which of the following formulas can often reconcile the difference between absorption- and variable-costing net income?
- A. Change in inventory units X predetermined variable-overhead rate per unit.
- B. Change in inventory units divided by predetermined variable-overhead rate per unit.
- C. Change in inventory units X predetermined fixed-overhead rate per unit.
- D. Change in inventory units divided by predetermined fixed-overhead rate per unit.
- E. (Absorption-costing net income - variable-costing net income) X fixed-overhead rate per unit
Homework Answers
answer:C . change in inventory units X predetermined fixed overhead per unit
explanation
1) the difference between the absorption costing and variable costing net operating income if fixed manufacturing overhead
2) predetermined fixed overhead rate = fixed manufacturing overhead cost/ units produced
3) when closing stock is present it is called fixed mfg cost differed in inventory , if there is no closing stock both methods will report the same profits
reconciliation schedule
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Which of the following formulas can often reconcile the
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