During the month of May, Robinson Corporation sold 1,000 units. The cost per uni
ID: 2547898 • Letter: D
Question
During the month of May, Robinson Corporation sold 1,000 units. The cost per unit for May was as
follows:
Cost Per Unit
Direct materials ..........................................$ 5.50
Direct labor..............................................3.00
Variable manufacturing overhead.............................1.00
Fixed manufacturing overhead...............................1.50
Variable administrative costs .................................50
Fixed administrative costs .................................. 3.50
Total ...................................................$15.00
May’s income using absorption costing was $9,500. The income for May, if variable costing had been
used, would have been $9,125. The number of units Robinson produced during May was
a. 750 units.
b. 925 units.
c. 1,075 units.
d. 1,250 units.
Explanation / Answer
Difference in net operating incoem = (9500-9125) = 375
Unit in ending inventory = 375/1.50 = 250 units
Production units = 1000+250 = 1250 units
so answer is d) 1,250 units
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