USE THE FOLLOWING INFORMATION FOR THE NEXT 2 QUESTIONS Cornell Products has the following information available...

USE THE FOLLOWING INFORMATION FOR THE NEXT 2 QUESTIONS

Cornell Products has the following information available for 2020:

UNITS

BEGINNING INVENTORY-----0 UNITS

ENDING INVENTORY----5,400 UNITS

COSTS

Direct materials	$1.00 per unit
Direct labor	$2.00 per unit
Variable manufacturing overhead	$1.50 per unit
Variable selling and administrative costs	$ .50 per unit
Fixed manufacturing overhead	$30,000/6,000 = $5.00 per unit
Fixed selling and administrative costs	$25,000

During 2020, Cornell produced 6,000 units out of which 5,400 units were sold for $20 each.

13. 6. Refer to the Cornell Products information above. What is net income under direct costing?

a.	$35,000
b.	$29,000
c.	$26,000
d.	$23,000

14. 7. Refer to the Cornell Products information above. What is net income under absorption costing?

a.	$23,000
b.	$29,000
c.	$26,000
d.	$35,000

Expert Solution

ekkarill92 answered 2 years ago

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