ick Links ee ATTSALES DASHBOARI workday Atlantic Region Readou E ATT LSee E - 6)

Question

ick Links ee ATTSALES DASHBOARI workday Atlantic Region Readou E ATT LSee E - 6) 0 Keyser Corporation, which has only one product, has provided the following dat Selling price $ 165 Units in beginning inventory Units produced Units sold Units in ending inventory 1,350 9,250 9,350 1/250 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense 1 Fixed costs: Fixed manufacturing overhead $ 74, 000 $166, 600 Fixed selling and administrative expense The company produces the same number of units every month, although the sales in ur month What is the net operating income for the month under absorption costing? Multiple Choice $4,900

Explanation / Answer

Caclulation of Unit Cost of Production by using Absorption Costing Particulars Amount Cost per Unit Direct Material $                    37.00 Direct Labour $                    54.00 Variable Manufacturing Overhead $                    18.00 Variable Costs per unit Fixed Manufaturing OVH(at observe rate) $                      8.00 ($ 74,000 / 9250 Units) $                 117.00 Manufacturing Cost Per unit = $                 117.00 CALCULATION OF OPERATING INCOME UNDER ABOSRPTION COSTING Particulars Amount Sales (9350 Units * 165) $ 15,42,750.00 Less: Manufacturing Cost Opening Stock (1350 Units * $117) $        1,57,950.00 Add: Units Produced (9250 Units * $ 117) $     10,82,250.00 Less: Closing Inventory $        1,46,250.00 Cost of Goods Manufactured $ 10,93,950.00 Net Operating Income $   4,48,800.00 Less : Variable Selling and adminsitrative Expenses $   2,61,800.00 Less : Fixed Selling and administration Expenses $   1,66,600.00 Net Opearating Income $       20,400.00 Answer = Option 3 = $ 20,400

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