Jeter Corporation had net income of $215,000 based on variable costing. Beginning and ending inventories were...
Jeter Corporation had net income of $215,000 based on variable costing. Beginning and ending inventories were 6,300 units and 10,600 units, respectively. Assume the fixed overhead per unit was $5 for both the beginning and ending inventory. What is net income under absorption costing?
Homework Answers
Answer- Net income under absorption costing = $236500.
Explanation-
| Net Income under absorption costing method | ||
| Particulars | Amount | |
| $ | ||
| Net income under variable costing method | 215000 | |
| Less:-Fixed manufacturing overheads brought in (opening inventories) | 6300 units*$5 per unit | 31500 |
| Add:-Fixed manufacturing overheads carried forward in(closing inventories) | 10600 units*$5 per unit | 53000 |
| Net income under absorption costing method | 236500 | |
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#1
#2
Absorption-Costing Income Statement
During the most recent year, Osterman Company had the following
data:
Units in beginning inventory
—
Units produced
10,000
Units sold ($47 per unit)
9,300
Variable costs per unit:
Direct materials
$9
Direct labor
$6
Variable overhead
$4
Fixed costs:
Fixed overhead per unit produced
$5
Fixed selling and administrative
$138,000
Required:
1. Calculate the cost of goods sold under
absorption costing.
$
2. Prepare an income statement using absorption
costing. Enter amounts as positive...
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#1
#2
Absorption-Costing Income Statement
During the most recent year, Osterman Company had the following
data:
Units in beginning inventory
—
Units produced
10,000
Units sold ($47 per unit)
9,300
Variable costs per unit:
Direct materials
$9
Direct labor
$6
Variable overhead
$4
Fixed costs:
Fixed overhead per unit produced
$5
Fixed selling and administrative
$138,000
Required:
1. Calculate the cost of goods sold under
absorption costing.
$
2. Prepare an income statement using absorption
costing. Enter amounts as positive...
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