Dolphin Company manufactures two-person sailboats with a variable cost of $1,000. The sailboats sell for...
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Accounting
Dolphin Company manufactures two-person sailboats with a variable cost of $1,000. The sailboats sell for $1,750 each. Budgeted fixed manufacturing overhead for the most recent year was $11,000,000. Planned and actual production for the year were the same.
Required:
State whether income is higher under variable or absorption costing and the amount of the difference in reported opearting income under the two methods. Treat each condition as an independent case.
1.
Production
22,000
units
Sales
25,000
units
2.
Production
10,600
units
Sales
10,600
units
3.
Production
11,000
units
Sales
9,800
units
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