Question
Olson manufactures a single product and sells it for $10 per unit. At the beginning of the year there were 1,000 units in inventory. Upon
Olson manufactures a single product and sells it for $10 per unit. At the beginning of the year there were 1,000 units in inventory. Upon further investigation, you discover that units produced last year had $3.00 of fixed manufacturing cost and $2.00 of variable manufacturing cost. During the year Olson produced 10,000 units of product. Each unit produced generated $3.00 of variable manufacturing cost. Total fixed manufacturing cost for the current year was $40,000. There were no inventories at the end of the year.
This current year Absorption Costing Net Income is
Select one:
a.
$36,000
b.
$35,000
c.
$37,000
d.
$38,000
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