Question

16 Saved Help Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 128 1:25:18 de 0 Units in beginning inventory Units produced Units sold Units in ending inventory 9,150 8,750 400 bok 22 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense 10 14 $137,250 $ 9,200 What is the net operating income for the month under absorption costing?

Answer 1

Answer : $17050

Assume Company Using Absorption Costing Calculation of Unit cost Under Absorption Costing Direct Material Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Over head 137250/9150 Unit Product Cost 111 Absorption Costing Unit Product Cost 111 Income Statement Under Absorption Costing Sales (8750*128) Cost of Goods Sold (8750*111) Gross Margin Total Selling and Administrative Overheads (Fixed +Variable ), (9200+(8750*14) Net Operating Income 1120000 971250 148750 131700 17050