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In: Accounting

HK Masks Limited produces and sells masks. Fixed manufacturing overhead incurred for the above production process...

HK Masks Limited produces and sells masks. Fixed manufacturing overhead incurred for the above production process totaled $800,000. Net operating income under variable costing was three million dollars. The company did not have beginning inventory, units produced were 250,000 and units sold were 150,500.

Required:

a. Calculate the units of ending inventory .

b. Compute the manufacturing overhead per unit absorbed in the ending inventory.

c. Use vertical 3 rows schedule to show the variances between the variable costing and absorption cost operating income figures.

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