Question

Zhender Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2018 and 2019 was 3,800 units. There was no beginning inventory in 2018. The following data summarized the 2018 and 2019 operations:

	2018			2019
Units sold		2,900			4,000
Units produced		3,800			3,800
Costs:
Variable factory overhead per unit	$	0.55		$	0.65
Fixed factory overhead	$	1,710		$	1,710
Variable marketing per unit	$	0.75		$	1.00
Fixed Selling and Administrative	$	650		$	650

Full costing operating income for 2018 is calculated to be: (Do not round intermediate calculations. Round your final answers to whole dollar amounts.)

Answer 1

Zahender Inc.
Full Costing Income Statements
	2018	2019
No of Unit sold	2900	4000
Sales Revenue @$2.60 (a)	$7,540	$10,400
Cost of Goods Sold
Beginning Inventory	$0	$900
Cost of Goods Manufactured ( 3800*1)(3800*1.10)	$3,800	$4,180
Cost of Goods Available for Sale	$3,800	$5,080
Ending Invenry ((3800-2900)X1) ((4180+900)/4700)X700)	$900	$757
Cost of Goods Sold (b)	$2,900	$4,323
Gross Margin (-b)	$4,640	$6,077
Selling and Administrative Expenses
Variable @$0.75 , $1	$2,175	$4,000
Fixed	$650	$650
Total Selling and Administrative Expenses	$2,825	$4,650
Net Operating Income ( Loss)	$1,815	$1,427
Working Note: Computation of Product Costing under full costing
	2018	2019
Variable Factory overhead Per Unit	$0.55	$0.65
Fixed Factory Overhead (1710/3800)	$0.45	$0.45
Total Product cost per Unit	$1.00	$1.10