The HF Corporation manufactures and sells toy gyroscopes. The following data is

Question

The HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year. Selling price per unit $ 8.10 Variable manufacturing costs per unit $ 1.88 Variable selling and administrative expenses per unit $ 4.55 Fixed manufacturing overhead? (in total) $ 76 comma 000 Fixed selling and administrative expenses? (in total) $ 84 comma 000 Units produced during the year 500 comma 000 Units sold during year 160 comma 000 Using absorption? costing, what is operating income for last? year? (Round any intermediary calculations to the nearest? cent.)

Explanation / Answer

SOLUTION

Net operating income = $159,200

Total manufacturing cost per unit = Fixed manufacturing cost per unit + Variable manufacturing cost per unit

= ($76,000/500,000) + $1.88

= 0.15 + 1.88 = $2.03

Particulars Amount ($) Amount ($) Sales (160,000 * $8.10) 1,296,000 Less: Cost of goods sold Beginning inventory 0 Cost of goods manufactured ($2.03 * 500,000) 1,015,000 Cost of goods available for sale 1,015,000 Less: Ending inventory ($2.03 * 340,000) (690,200) Cost of goods sold 324,800 Gross profit 971,200 Less: Variable selling and administrative expenses (160,000*$4.55) (728,000) Fixed selling and administrative expenses (84,000) Net Operating income 159,200

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.