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Bramble Industries makes artificial Christmas trees. The unit costs for producing a tree are: Direct materials $25 Direct labor $13 Variable overhead $13 Fixed overhead

Bramble Industries makes artificial Christmas trees. The unit costs for producing a tree are: Direct materials $25 Direct labor $13 Variable overhead $13 Fixed overhead $5 The company also incurs $1 per tree in variable selling and administrative costs and $3,600 in fixed marketing costs. At the beginning of the year the company had 850 trees in the beginning Finished Goods Inventory.

The company produced 2,100 trees during the year. Sales totaled 1,900 trees at a price of $102 per tree.

(a) Based on absorption costing, what was the companys operating income for the year?

Companys operating income $

(b) Based on variable costing, what was the companys operating income for the year?

Companys operating income $

(c) Assume that in the following year the company produced 2,100 trees and sold 2,700. Based on absorption costing, what was the operating income for that year? Based on variable costing, what was the operating income for that year?

Absorption Costing

Variable Costing Operating income $ $

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