Question

Required information [The following information applies to the questions displayed below.) Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. $ 300 per unit 100,000 units 104,000 units 4,000 units $ 540,000 320,000 $ 860,000 Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (4,000 units X $135) Fixed (4,000 units X $80) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this year Variable Fixed $ $ 48 per unit 62 per unit $3,000,000 $ 7,400,000 $1,450,000 4,400,000

Answer 1

31200000 OAK MART COMPANY Absorptiong Costing Income Statement Sales Less: cost of goods sold Beginning inventory 860000 Manufacturing costs this year Direct materials 4800000 Direct labor 6200000 Variable overhead costs 3000000 Fixed overhead costs 7400000 Less: Ending inventory 22260000 8940000 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses 4400000 1450000 Total fixed expenses Net income (loss) 5850000 3090000

The dollars difference in variable costing income and absorption costing income = 1 4000 units X 80 fixed overhead per unit