QUESTION 8 Jupiter Corporation incurred fixed manufacturing

QUESTION 8 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 any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) o higher by $8,250.00 O lower by $2,250.00 o lower by $8,250.00 o higher by $2,250.00 as compared to the operating income under absorption costing. (Round

Solution

Answer lower by 8250

the operating income reported will be different aqs the unit level of inventory increased during the

account period

denominator rate = 18000 / 2400

= 7.5

operative income = 2700 - 1600 * 7.5

= 1100 * 7.5

= 8250

lower by 8250 under the variable costing because 8250 of fixed manufacturing cost remain in

inventory under absorption