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 Selling price Per unit per year $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

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 Selling price Per unit per year $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 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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