Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in Year 3. Particulars Per unit per year Selling price $240 Direct materials $79 Direct labor $59 Variable manufacturing overhead $10 Sales commission $11 Fixed manufacturing overhead $450,000 Fixed selling and administrative expense $250,000 Using absorption costing, what is the net operating income for Year 3? a. $415,000 b. $402,500 c. $425,000 d. $69,000

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...
icon
Related questions
Question

Answer of general Accounting

Assume the following information for a company that produced and sold 10,000 units
during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while
producing 12,000 units and selling 15,000 units in Year 3.
Particulars
Per unit per year
Selling price
$240
Direct materials
$79
Direct labor
$59
Variable manufacturing overhead
$10
Sales commission
$11
Fixed manufacturing overhead
$450,000
Fixed selling and administrative expense
$250,000
Using absorption costing, what is the net operating income for Year 3?
a. $415,000
b. $402,500
c. $425,000
d. $69,000
Transcribed Image Text:Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in Year 3. Particulars Per unit per year Selling price $240 Direct materials $79 Direct labor $59 Variable manufacturing overhead $10 Sales commission $11 Fixed manufacturing overhead $450,000 Fixed selling and administrative expense $250,000 Using absorption costing, what is the net operating income for Year 3? a. $415,000 b. $402,500 c. $425,000 d. $69,000
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College