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selling price of a product will have the same impact

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6-5). A 10% decease in the selling price of a product will have the same impact on net income as a 10%increase in the variable expenses. I need help understanding these questions. It's asking if I agree or disagree.;Exe 7-5) Variable and Absorption Costing Unit Product Costs and Income Statements.;Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations;Variable costs per unit;Manufacturing;Direct materials??????????$6;Direct labor??????????? $9;Variable manufacturing overhead??? $3;Variable selling and administrative??????.$4;Fixed costs per year;Fixed manufacturing overhead?????$300,000;Fixed selling and administrative?????$190,000;During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 per unit.;Required;1. Assume that the company uses the absorption costing method;a. Compute the unit product cost.;b. Prepare an income statement for the year.;2. Assume that the company uses the variable costing method;a. Compute the unit product cost.;b. Prepare an income statement for the year.

 

Paper#26931 | Written in 18-Jul-2015

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