d.What is the fixed overhead deferred under absorption costing in year 2?e.How do you reconcile the variable costing and absorption costing income figures for year 2?
Miller Company produces a single product. The company had the following results for its first two years of operation:
| year 1 | year 2 | |
| sales | 1,200,000 | 1,200,000 |
| cogs | 800,000 | 680,000 |
| gross margin | 400,000 | 520,000 |
| selling and admin expenses | 300,000 | 300,000 |
| Net Operating Income | 100,000 | 220,000 |
n Year 1, the company produced and sold 40,000 units of its only product; in Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is P5 per unit and its fixed
d.What is the fixed overhead deferred under absorption costing in year 2?e.How do you reconcile the variable costing and absorption costing income figures for year 2?
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