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Please explain it clearly on each steps, thanks Preferred Products has the following cost information available for 2012: Direct materials $4.00 per unit Direct labor
Please explain it clearly on each steps, thanks
Preferred Products has the following cost information available for 2012:
Direct materials | $4.00 per unit |
Direct labor | $3.00 per unit |
Variable manufacturing overhead | $2.00 per unit |
Variable selling and administrative costs | $1.00 per unit |
Fixed manufacturing overhead | $25,000 |
Fixed selling and administrative costs | $10,000 |
During 2012, Preferred produced 5,000 units out of which 4,600 units were sold for $30 each. Required:
A. | Calculate Preferred's net operating income assuming the company uses variable costing. |
$ | |
B. | Calculate Preferred's net operating income assuming the company uses absorption costing. |
$ |
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