Company X incurred fixed manufacturing costs of $690000. The following information is available:
Budgeted level of production: 23000 Units produced in January: 18400 Units sold in January: 13800 Inventory, January 1st: 0 units How does the operating income under variable costing compare with the operating under absorption costing in the month of January?

Question

Company X incurred fixed manufacturing costs of $690000. The following information is available: 
 Budgeted level of production: 23000 Units produced in January: 18400 Units sold in January: 13800 Inventory, January 1st: 0 units   How does the operating income under variable costing compare with the operating under absorption costing in the month of January?

Accepted Answer

Variable costing shows an operating income lower than absorption costing; difference = $138000

Answer

There is no difference

Answer

None of the other options is correct

Answer

Variable costing shows an operating income higher than absorption costing; difference = $138000

Answer

Impossible to tell

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Company X incurred fixed manufacturing costs of $690000. The following informat...

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