Required information [The following information applies to the questions display

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. Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs 310 per unit 120,000 units 123,750 units 3,750 units Variable (3,750 units $135) Fixed (3,750 unita $70) 506,250 262.500 768,750 Manufacturing costs this year Direct materials 62 per unit Overhead costs this year Variable overhead Fixed overhead $3,200,000 $7,600,000 Selling and administrative costs this year Variable Fixed $1,350,0o0 4,400,000 2. Prepare the current year income statement for the company using absorption costing. K Prex 5 of 10 Next >

Explanation / Answer

SOLUTION OAK MART INCOME STATEMENT USING ABSORPTION COSTING PARTICULARS DETAILS AMOUNT A) Revenue (123750*310) 38362500 38362500 Cost Opening Inventory(given) 768750 768750 Cost of Production Direct Material(120000*42) 5040000 Direct Labour (120000*62) 7440000 Overheads- variable 3200000 Overhead - Fixed 7600000 23280000 Administative and selling cost Variable 1350000 Fixed 4400000 5750000 B) Total Cost 29798750 Net Income (A-B) 8563750

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