Exercise 6-22A (Algo) Converting variable costing income to absorption costing income LO A2

A manufacturer reports the following information for the past three years.

	Year 1	Year 2	Year 3
Variable costing income	$ 140,000	$ 146,400	$ 143,950
Beginning finished goods inventory (units)	0	2,200	1,700
Ending finished goods inventory (units)	2,200	1,700	1,800
Fixed overhead (FOH) per unit	$ 1.20	$ 1.20	$ 1.20

Compute income for each of the three years using absorption costing. Hint: Fixed overhead in inventory equals the FOH per unit Units in inventory.

Note: Amounts to be deducted should be indicated with a minus sign.

Exercise 6-22A (Algo) Converting variable costing income to absorption costing income LO A2 A manufacturer reports the following information for the past three years. Compute income for each of the three years using absorption costing. Hint: Fixed overhead in inventory equals the FOH per unit Units in inventory. Note: Amounts to be deducted should be indicated with a minus sign