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$3 $3 Use the following information to answer the next 2 questions. Northern Company reported the following information for the first three years of operations.
$3 $3 Use the following information to answer the next 2 questions. Northern Company reported the following information for the first three years of operations. Year 1 Year 2 Year 3 Units produced 15,000 20,000 24,000 Units sold 12,000 19,200 26,000 Variable production cost per unit $4 $4 $4 Fixed production cost $24,000 $24,000 $24,000 Variable selling cost per unit $3 Fixed selling cost $14,000 $14,000 $14,000 Normal overhead base (in units) 20,000 24,000 16,000 Assume fixed overhead is applied based on the normal overhead base for each year. 13. (1 point) If the company had an operating income of $18,500 in Year 2 under variable costing, what was their operating income under absorption costing in Year 2? a. $22,300 b. $18,700 c. $18,300 d. $19,300 e. $19,460 f. $18,260 g. $19,780 h. None of the above 14. (1 point) If the company had an operating income of $37,400 in Year 3 under absorption costing, what was their operating income under variable costing in Year 3? a. $38,900 b. $36,700 c. $40,160 d. $39,400 e. $38,500 f. $39,800 g. $40,400 h. None of the above
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