“During 19×2, Krepps Company manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Fixed Overhead $240,000 Variable Overhead $200,000 Direct Labor $110,000 Direct Materials $170,000 Sales totaled $825,000 for the year, variable selling expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There were no units in the beginning inventory. 85. Under variable costing, the company’s net income for the year would be a. $101,250 lower than under absorption costing. b. $60,000 lower than under absorption costing. c. $101,250 higher than under absorption costing. d. $60,000 higher than under absorption costing.”,”2Difference between production and sales:20,000 – 15,000 = 5,000 unitsPer unit fixed overhead = 240,000 = $12 / unit 20,000 Production > Sales Absorption Net Income > Variable Net Income By 5,000 x 12 = $60

“During 19×2, Krepps Company manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Fixed Overhead $240,000 Variable Overhead $200,000 Direct Labor $110,000 Direct Materials $170,000 Sales totaled $825,000 for the year, variable selling expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There were no units in the beginning inventory. 85. Under variable costing, the company’s net income for the year would be a. $101,250 lower than under absorption costing. b. $60,000 lower than under absorption costing. c. $101,250 higher than under absorption costing. d. $60,000 higher than under absorption costing.”,”2Difference between production and sales:20,000 – 15,000 = 5,000 unitsPer unit fixed overhead = 240,000 = $12 / unit 20,000 Production > Sales Absorption Net Income > Variable Net Income By 5,000 x 12 = $60

000″