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The following information pertains to Chacon Inc. for last year: Beginning inventory in units 4,900 Units produced 20,800 Units sold 23,600 Costs per unit: Direct
The following information pertains to Chacon Inc. for last year:
Beginning inventory in units | 4,900 | |
Units produced | 20,800 | |
Units sold | 23,600 | |
Costs per unit: | ||
Direct materials | $7.90 | |
Direct labor | $4.40 | |
Variable overhead | $1.60 | |
Fixed overhead* | $3.75 | |
Variable selling expenses | $2.90 | |
Fixed selling and administrative expenses | $24,200 |
* Fixed overhead totals $78,000 per year.
Assume that the selling price is $25 per unit.
1. Calculate operating income using absorption costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.
2. Calculate operating income using variable costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.
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