Farris Corp operations: Selling price its in beginning inventory Units produced Units sold $96 O 8,750 8,350 ts in ending inventory 400 Variable costs per unit: Direct materials Direct labor turing overhead $14 $56 $2
Farris Corp operations: Selling price its in beginning inventory Units produced Units sold $96 O 8,750 8,350 ts in ending inventory 400 Variable costs per unit: Direct materials Direct labor turing overhead $14 $56 $2
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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
Transcribed Image Text:Farris Corporation, which has only one product, has provided the following data concerning its most recent month of
operations:
Selling price
Units in beginning inventory
Units produced
Units sold
$96
O
8,750
8,350
Units in ending inventory 400
Variable costs per unit:
Direct materials
$14
Direct labor
$56
Variable manufacturing overhead
$2
ble selling and administrative expense $ 6
Fixed costs:
Fixed manufacturing overhead
$131,250
selling and administrative expense $8,400
The net operating income for the month under absorption costing?

Transcribed Image Text:Units in beginning inventory
Units produced
Units sold
8,750
8,350
Units in ending inventory 400
Variable costs per unit:
Direct materials
Direct labor
Variable manufacturing overhead
$14
$56
$2
Variable selling and administrative expense $ 6
Fixed costs:
Fixed manufacturing overhead
$131,250
Fixed selling and administrative expense $ 8,400
What is the net operating income for the month under absorption costing?
$10,650
$16,650
O $6,000
O $18.150
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