Tilley Manufacturing Company produces one product, which sells for $100. Product costs at the normal level of manufacturing operations (100,000 units) are the following:

During its first year of operations, Tilley produced 100,000 units and sold 90,000 units.
Determine:
1. Gross profit using absorption costing.
2. Income from operations using variable costing.

Transcribed Image Text:

Direct materials, Direct labor.... $25 per unit $20 per unit Variable overhead Fixed overhead. $10 per unit $495.000