Question
ABC manufactures a single product. Assume the following data for the year just completed: Fixed costs in total Selling & Administrative. $ 60,000 Production 82,500
ABC manufactures a single product. Assume the following data for the year just completed: Fixed costs in total
Selling & Administrative. $ 60,000
Production 82,500
Variable cost per unit.
Selling & Administrative $5
Production. $8
There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. Each unit sells for $35.
Required:
1. What is the unit product cost using Absorption costing
2. What is the unit product cost using Variable costing?
3 . What is the companys operating income using variable costing?
4. What is the companys operating income using absorption costing?
5. Reconcile absorption and variable costing net operating incomes and explain why the two amounts differ.
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