Question

In: Accounting

Etters Manufacturing Company has provided the following financial data for its most recent month. Unit Selling...

Etters Manufacturing Company has provided the following financial data for its most recent month.

Unit Selling Price	$18
Units in beginning inventory	0
Units produced	10,000
Units sold	9,500
Variable costs per unit:
Direct materials	$6
Direct labor	$4
Manufacturing overhead	$3
Selling and administrative costs	$1
Fixed costs:
Manufacturing overhead	$12,000
Selling and administrative costs	$8,000

Required:

Prepare an income statement using an absorption costing format.

LO2

Solution:

Sales $171,000

Less cost of goods sold:

Variable manufacturing $123,500

Fixed manufacturing 11,400 134,900

Gross profit 36,100

Less selling and administrative expenses

Variable 9,500

Fixed 8,000 17,500

Net operating income $ 18,600

How is the 11,400 (fixed manufacturing) calculated??

Expert Solution

ekkarill92 answered 10 months ago

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