Question
Q3 : You are given the following information about ABC Company for year 2017 and you are required to compute net operating income using both
Q3: You are given the following information about ABC Company for year 2017 and you are required to compute net operating income using both absorption and variable costing with your comment on results. (3 marks)
| Number of units produced | 30,000 |
| Number of units sold | 25,000 |
| Units in begging inventory | 0 |
| Units sales price | SR 40 |
| Variable costs per units |
|
| Direct material | SR7 |
| Direct labor | SR5 |
| Manufacturing overhead | SR3 |
| Selling and administrative expenses | SR 5 |
| Fixed expenses per year: |
|
| Manufacturing overhead | SR 150,000 |
| Selling and administrative expenses | SR 100,000 |
Answer:
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