Reference no: EM132548372

JYD Corporation uses an absorption costing system for internal reporting purposes. At present, however, it is considering to use the variable costing system.

Following are some data regarding JYD Corporation's budgeted and actual operations for the calendar year 2018.

Costs                                                      Budgeted                              Actual

Materials                                           P25,200                        P23,400

Labor                                                18,480                           17,160

Variable Factory Overhead                       8,400                            7,800

Fixed Factory Overhead                          10,640                          10,000

Variable Selling Expenses                           16,800                        15,000

Fixed Selling Expenses                              14,700                        14,700

Variable Administrative Expenses                4,200                             3,750

Fixed Administrative Expenses                     6,300                                6,375

Total                                                   P104,720                           P98,185

                                                                         Budgeted                               Actual

                                                                             (Units)                                 (Units)

Finished goods inventory beginning                   280                              280

Production                                                  1,120                             1,040

Sales                                                          1,120                           1,000

• The budgeted costs were computed based on the budgeted production and sales of 1,120 units, the company's normal capacity level. The Corporation uses a predetermined factory overhead rate for applying manufacturing overhead costs to its product. The denominator level used in developing the predetermined rate is the firm's normal capacity. Any over or under applied factory overhead cost is closed to cost of goods sold at the end of the year.
• There is no work in process inventories at either the beginning or end of the year. The actual selling price was the same as the amount planned, P130 per unit.
• The previous year's planned per unit manufacturing costs were the same as the current planned unit manufacturing cost. The beginning inventory of finished goods for absorption costing purposes was valued at such per- unit manufacturing cost.

Question 1: What is the Corporation's operating income (loss) under both the absorption and variable costing methods?