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The inventory level of Product Y has reduced by 40 units over a single period. The cost card for Product Y is as follows:
The profit for Product Y using marginal costing is $26,000.
If the company used absorption costing, what would the profit for Product Y be?
Give your answer to the nearest whole $.
Suggested Answer: B, D, E, G
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36 comments · newest first
RE
Ressie
11 months ago
Totally agree, $24,600 makes sense!
TA
Tamesha
11 months ago
Wait, how can it drop that much? Sounds off.
JA
Jacob
12 months ago
I think it should be around $24,600.
PE
Peggie
12 months ago
Absorption costing usually shows higher profits, right?
EV
Eveline
12 months ago
Profit with marginal costing is $26,000.
AM
Amber
1 year ago
I think the profit would decrease because of the reduction in inventory, but I can't recall the exact figures we used in the examples.
AV
Avery
1 year ago
I feel a bit confused about how to calculate the fixed overhead per unit. Did we cover that in class?
TE
Terina
1 year ago
This question seems similar to one we practiced where we had to adjust profits based on inventory changes. I think I need to subtract the fixed costs related to the 40 units.
CA
Carma
1 year ago
I remember that absorption costing includes fixed overheads in the product cost, but I'm not sure how to adjust the profit correctly.
HE
Herminia
1 year ago
I'm a bit confused. How do we know the fixed overhead cost per unit? The question doesn't give us that information directly. I'll need to think about how to approach this without that data.
HE
Herschel
1 year ago
I've got this! The key is to use the information provided on the cost card and the reduction in inventory level. We can calculate the total cost and then subtract it from the revenue to get the profit under absorption costing.
JU
Jutta
1 year ago
Hmm, this looks tricky. I'm not sure how to incorporate the fixed overhead into the calculation. I'll need to review my notes on absorption costing.
LE
Lelia
1 year ago
Okay, let's think this through step-by-step. We need to calculate the profit under absorption costing, which means we need to consider the fixed overhead costs.
TR
Tracey
1 year ago
Alright, let's break this down. We know the profit under marginal costing is $26,000, and the inventory level has decreased by 40 units. I think if we can figure out the fixed overhead cost per unit, we can use that to adjust the profit calculation.
LU
Luther
1 year ago
This question seems straightforward, but I want to make sure I understand the purpose of the VRRP-A floating IP address before selecting an answer.
CH
Chun
1 year ago
Okay, I've got this. Based on my knowledge, the correct answers are B. STIX/TAXII and D. SplunkEnterpriseThreatGenerator. I'm confident those are the right choices.
AL
Alana
1 year ago
This seems like a straightforward question about the purpose of unit tests. I'll carefully read through the options and select the one that best describes what unit tests are designed to verify.
TO
Tom
1 year ago
I heard the exam committee is considering a new question: 'If a production manager drops a box of inventory, how many units are considered 'lost' for accounting purposes?'
LU
Lucia
1 year ago
I bet the person who wrote this question is laughing at us right now, trying to trip us up with all these cost accounting concepts. Joke's on them, I'm going to crush this exam!
TO
Toi
1 year ago
Let's calculate it together to make sure we get the right answer.
JO
Josefa
1 year ago
I'm not sure, maybe we should double check the calculations.
EL
Eleni
1 year ago
I think it's A) $24600 too.
MY
My
1 year ago
A) $24600
KI
Kina
1 year ago
I'm just gonna go with the lowest answer option, that's always a safe bet, right? Just kidding, I know I need to put some real thought into this one.
BO
Bo
1 year ago
Hmm, $26,000 under marginal costing, but what about that fixed overhead? This is where the absorption costing calculation comes into play.
FL
Floyd
1 year ago
So, the profit would be lower compared to marginal costing due to the inclusion of fixed overhead costs.
LE
Leslie
1 year ago
That's right, absorption costing takes into account fixed overhead costs which are included in the cost of goods sold.
KI
Kimberlie
1 year ago
Under absorption costing, the profit for Product Y would be $24,600.
RO
Rosann
2 years ago
I can see why this question is tricky. The key is to remember that absorption costing includes fixed overhead, while marginal costing doesn't. Gotta make sure to factor that in.
GL
Gladis
1 year ago
Exactly, so we need to factor that in when calculating the profit.
HO
Howard
1 year ago
That makes sense, absorption costing includes fixed overhead costs.
JA
Jade
1 year ago
I think the profit for Product Y using absorption costing would be $24,600.
JE
Jesus
1 year ago
A) $24600
AL
Alishia
2 years ago
I'm not sure about this. Can someone explain why absorption costing would result in a lower profit?
ER
Erick
2 years ago
I agree with Rosendo. Absorption costing includes fixed overhead costs, so the profit would be lower.
RO
Rosendo
2 years ago
I think the profit for Product Y using absorption costing would be $24,600.