Using the Given Information, Determine the Income Under Both the Absorption

question 38

Essay

Using the given information, determine the income under both the absorption and the direct (variable) costing methods for the company for the year. Explain the difference, if any. $\begin{array}{llcc} \text { Beginning Inventory } & -0- \text { units} \\ \text { Units produced } &15,000\\ \text { Ending Inventory } &2,000\\ \text {Sales price per unit } &\$44.00\\ \text { Variable manufacturing costs per unit } &19.00\\ \text { Variable selling \( \& \) administrative costs per unit} &4.00\\ \text { Fixed manufacturing costs } &\$75000\\ \text { Fixed selling and administrative costs } &\$79,950\\\end{array}$

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Definitions:

Ambivalent

Having mixed or contradictory feelings about someone or something.

Psychosexual Development

Freud's theory that childhood stages of development (oral, anal, phallic, latency, genital) affect an individual's adult personality.

Superego

Part of the Freudian psychoanalytic theory, representing the ethical component of personality that provides the moral standards by which the ego operates.