1: find the operating income (loss) under absorption cost 1: find the operating

Question

1: find the operating income (loss) under absorption cost 1: find the operating income (loss) under absorption cost 2: what is the net operating income for the month under absorption cost Secure hapter 6 Qulz 6 2 Mandato Corporation has provided the following data for its two r t recent years of operation: Selling price per unit $50 00PM) Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $10 Direct labor Variable manufacturing overhead Pixed manufacturing overhead per year $72,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold Pixed selling and administrative expense per year $70,000 Units in beginning inventory Units produced during the year Units sold during the year Units in ending inventory Year 1 Year 2 0 3,000 9,000 8,000 6,000 9,000 3,000 2,000 The net operating income (loss) under absorption costing in Year 1 is closest to

Explanation / Answer

1 Sales 300000 =6000*50 Less: Cost of goods sold 174000 =6000*(10+6+5+8) Gross margin 126000 Selling and administrative expenses 100000 =70000+(6000*5) Net operating income 26000 2 Sales 678600 =8700*78 Less: Cost of goods sold 530700 =8700*(18+10+4+29) Gross margin 147900 Selling and administrative expenses 130500 =87000+(8700*5) Net operating income 17400

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