Question
Neef Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 84 Manufacturing costs: Variable manufacturing
Neef Corporation has provided the following data for its two most recent years of operation:
Selling price per unit | $ | 84 |
Manufacturing costs: |
|
|
Variable manufacturing cost per unit produced: |
|
|
Direct materials | $ | 12 |
Direct labor | $ | 5 |
Variable manufacturing overhead | $ | 4 |
Fixed manufacturing overhead per year | $ | 432,000 |
Selling and administrative expenses: |
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|
Variable selling and administrative expense per unit sold | $ | 5 |
Fixed selling and administrative expense per year | $ | 61,000 |
| Year 1 |
| Year 2 |
Units in beginning inventory | 0 |
| 3,000 |
Units produced | 12,000 |
| 9,000 |
Units sold | 9,000 |
| 10,000 |
Units in ending inventory | 3,000 |
| 2,0000 |
a) What is the net operating income (loss) under variable costing in Year 1 is (Prepare an Income Statement) b) What is the net operating income (loss) under absorption costing in Year 2 is (Prepare an Income Statement)
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