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. Per Unit Per Year Selling price Direct materials Direct labor $240 $ 76 $56 Variable manufacturing overhead $ 10 Sales commission Fixed manufacturing overhead Fixed selling and administrative expense Using variable costing, what is the net operating income for Year 3?_ $ 11 $450,000 $ 250,000 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. Selling price Direct materials Per Unit Per Year $ 240 $ 78 Direct labor $ 58 Variable manufacturing overhead $ 10 Sales commission $ 11 Fixed manufacturing overhead Fixed selling and administrative expense Using absorption costing, what is the net operating income for Year 3? $ 450,000 $ 250,000

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 14EA: Cool Pool has these costs associated with production of 20,000 units of accessory products: direct...
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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.
Per Unit
Per Year
Selling price
Direct materials
Direct labor
$240
$ 76
$56
Variable manufacturing overhead
$ 10
Sales commission
Fixed manufacturing overhead
Fixed selling and administrative expense
Using variable costing, what is the net operating income for Year 3?_
$ 11
$450,000
$ 250,000
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. Per Unit Per Year Selling price Direct materials Direct labor $240 $ 76 $56 Variable manufacturing overhead $ 10 Sales commission Fixed manufacturing overhead Fixed selling and administrative expense Using variable costing, what is the net operating income for Year 3?_ $ 11 $450,000 $ 250,000
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.
Selling price
Direct materials
Per Unit
Per Year
$ 240
$ 78
Direct labor
$ 58
Variable manufacturing overhead
$ 10
Sales commission
$ 11
Fixed manufacturing overhead
Fixed selling and administrative expense
Using absorption costing, what is the net operating income for Year 3?
$ 450,000
$ 250,000
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. Selling price Direct materials Per Unit Per Year $ 240 $ 78 Direct labor $ 58 Variable manufacturing overhead $ 10 Sales commission $ 11 Fixed manufacturing overhead Fixed selling and administrative expense Using absorption costing, what is the net operating income for Year 3? $ 450,000 $ 250,000
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