During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials Direct labor Variable overhead Fixed overhead $4 per unit $3 per unit $3 per unit $342,000 per year The company produced 38,000 units, and sold 29,500 units, leaving 8,500 units in inventory at year-end. Income calculated under variable costing is determined to be $410,000. How much income is reported under absorption costing? Multiple Choice О $752,000 о $486,500 $401,000 $333,500

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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During its first year of operations, the McCormick Company incurred the following manufacturing costs:
Direct materials
Direct labor
Variable overhead
Fixed overhead
$4 per unit
$3 per unit
$3 per unit
$342,000 per year
The company produced 38,000 units, and sold 29,500 units, leaving 8,500 units in inventory at year-end. Income calculated under variable costing is
determined to be $410,000. How much income is reported under absorption costing?
Multiple Choice
О
$752,000
о
$486,500
$401,000
$333,500
Transcribed Image Text:During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials Direct labor Variable overhead Fixed overhead $4 per unit $3 per unit $3 per unit $342,000 per year The company produced 38,000 units, and sold 29,500 units, leaving 8,500 units in inventory at year-end. Income calculated under variable costing is determined to be $410,000. How much income is reported under absorption costing? Multiple Choice О $752,000 о $486,500 $401,000 $333,500
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