Jupiter Corporation Incurred Fixed Manufacturing Costs of $18,000 During 2017

question 185

Multiple Choice

Jupiter Corporation incurred fixed manufacturing costs of $18,000 during 2017. Other information for 2017 includes:
The budgeted denominator level is 2,400 units.
Units produced total 2,700 units.
Units sold total 1,600 units.
Variable cost per unit is $4
Beginning inventory is zero.
The fixed manufacturing cost rate is based on the budgeted denominator level.
The operating income using variable costing will be ________ as compared to the operating income under absorption costing. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

• A) lower by $8,250.00
• B) lower by $2,250.00
• C) higher by $8,250.00
• D) higher by $2,250.00

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