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In: Accounting

You are given the following information: Units in beginning inventory 0 Units produced 40,000 Units sold...

You are given the following information:

Units in beginning inventory

0

Units produced

40,000

Units sold

37,000

Selling price per unit

$120.00

Variable costs per unit:

    Direct materials

$15.00

    Direct labor

$30.00

    Variable manufacturing overhead

$5.00

   Variable selling and administrative

$3.00

Fixed expenses per year:

   Fixed manufacturing overhead

$600,000

   Fixed selling and administrative

$800,000


Based on this information, calculate the company's operating income under both absorption costing and variable costing approaches. If there is a difference between the two income numbers, show the reconciliation between the two.

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Expert Solution

ekkarill92 answered 2 years ago
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