Question
26. Rhea Corporation has provided the following data for its two most recent years of operation: (Selling price and all costs are constant for both
26. Rhea Corporation has provided the following data for its two most recent years of operation: (Selling price and all costs are constant for both years.) Selling price per unit $ 67
Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 10 Direct labor $ 5 Variable manufacturing overhead $ 3 Fixed manufacturing overhead per year $252,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 65,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 9,000 7,000 Units sold during the year 8,000 7,000 Units in ending inventory 1,000 1,000 The net operating income (loss) under absorption costing in Year 2 is closest to: a. $6,000 b. $99,000 c. ($2,000) d. $71,000 27. Macrone Corporation has provided the following data for its most recent year of operation: Selling price per unit $ 59 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 11 Direct labor $ 6 Variable manufacturing overhead $ 4 Fixed manufacturing overhead per year $88,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4
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