Question
Loyal Consumer Products Limited produces and sells antibacterial cleanser. Fixed manufacturing overhead incurred for the above production process totaled $902,000. Net operating income under variable
Loyal Consumer Products Limited produces and sells antibacterial cleanser. Fixed manufacturing overhead incurred for the above production process totaled $902,000. Net operating income under variable costing was 2.1 million dollars. The company did not have beginning inventory, units produced were 310,000 and units sold were 215,000.
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Calculate the units of remaining inventory.
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Compute the manufacturing overhead per unit.
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Use vertical 3 rows schedule to show the variances between the variable costing and
absorption cost operating income figures.
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In this case, what is the effect on NOI under absorption costing method? (less than 10 words).
Also, explain briefly the reason (less than 10 words).
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