Question

Selling price $117 Units in beginning inventory 750 Units produced 8,650 Units sold 8,750 Units in ending inventory 650 Variable costs per unit: Direct materials $ 25 Direct labor $ 42 Variable manufacturing overhead Variable selling and administrative expense $ 16 Fixed costs: Fixed manufacturing overhead $ 69,200 Fixed selling and administrative expense $ 163,000 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. $ 6 What is the net operating income for the month under absorption costing?

Answer 1

Particulars	Amount	Amount
Sale Revenue (8750*117)		$ 1,023,750.00
Cost of Goods Sold
Beginning Inventorry (750*81)	$    60,750.00
Add Production Cost (8650*81)	$ 700,650.00
Cost of Goods available for sale	$ 761,400.00
Ending inventory (650*81)	$ (52,650.00)	$      708,750.00
Gross Profit		$      315,000.00
Markting and Adminstrative expenses
Variable expenses (8750*16)	$ 140,000.00
Fixed expenses	$ 163,000.00	$   (303,000.00)
Net Operating Income		$        12,000.00

Working 1
Direct Material	$    25.00
Direct Labour	$    42.00
Variable Overheards	$       6.00
Fixed Overheads (69200/8650)	$       8.00
Manufacturing Cost per Unit	$    81.00