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The following information was extracted from the first year absorption-based accounting records of Enigma Corporation Total fixed costs incurred P100,000 Total variable costs incurred 50,000 Total period costs incurred 70,000 Total variable period costs incurred 30,000 Units produced 20,000 Units sold 12,000 Unit sales price P12 3
The following information was extracted from the first year absorption-based accounting records of Enigma Corporation
Total fixed costs incurred P100,000
Total variable costs incurred 50,000
Total period costs incurred 70,000
Total variable period costs incurred 30,000
Units produced 20,000
Units sold 12,000
Unit sales price P12
3. Based on variable costing, if Enigma had sold 12,001 units instead of 12,000, its income before income taxes would have been
a. P9.50 higher.
b. P11.00 higher.
c. P8.50 higher.
d. P8.33 higher.
Expert Solution
Based on variable costing, if Enigma had sold 12,001 units instead of 12,000, its income before income taxes would have been P11.00 higher. (2,011-2,000)
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