Craig Company Has Per-Unit Fixed and Variable Manufacturing Costs of $40

question 30

Essay

Craig Company has per-unit fixed and variable manufacturing costs of $40 and $15, respectively. Variable selling and administrative costs are $9 per unit. Consider the two independent cases that follow for the firm.
Case A: Variable-costing income, $110,000; sales, 6,000 units; production, 6,000 units
Case B: Variable-costing income, $178,000; sales, 7,500 units; production, 7,100 units
Required:
A. From a product-costing perspective, what is the basic difference between absorption costing and variable costing?

B. Compute Craig's absorption-costing income in Case
C. Compute Craig's absorption-costing income in Case

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Definitions:

Wade-Davis Bill

Radical Republicans’ 1864 plan for Reconstruction that required loyalty oaths, abolition of slavery, repudiation of war debts, and denial of political rights to high-ranking Confederate officials; President Lincoln refused to sign the bill.

Loyalty Oath

An oath or pledge affirming one's allegiance to a state or nation, often required by governments of its employees or members of its military forces.

Radical Republicans

A faction within the U.S. Republican Party during and after the Civil War that advocated for the complete abolition of slavery and harsh reconstruction policies for the Southern states.

Battles in Virginia

Battles in Virginia refers to various significant military engagements that took place in the state of Virginia, a location of numerous critical conflicts during both the American Revolutionary War and the Civil War.