Aaker Corporation, which has only one product, has provided the following data c

Question

Aaker Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

What is the net operating income for the month under absorption costing?

Selling price $99 Units in beginning inventory 0 Units produced 6,300 Units sold 6,000 Units in ending inventory 300 Variable costs per unit:    Direct materials $12    Direct labor $42    Variable manufacturing overhead $6    Variable selling and administrative $6 Fixed costs:    Fixed manufacturing overhead $170,100    Fixed selling and administrative $24,000

Explanation / Answer

Unit product cost:    Direct materials 12    Direct labor 42    Variable manufacturing overhead 6    Fixed manufacturing overhead 27 =170100/6300 Unit product cost 87 Sales 594000 Cost of goods sold 522000 Gross Margin 72000 Selling and administrative expenses 60000 =24000+(6000*6) Net operating income 12000

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