Fey Company has the following information: Variable production costs Fixed OH production costs Variable selling & admin Fixed selling & admin Normal annual production Budgeted annual production Actual annual production Actual annual sales Beginning inventory $14 per unit $140.000 per year $7 per unit $112.000 per year 20.000 units 19.000 units 15.000 units 19.000 units 5.000 units The company uses the FIFO inventory method. Over- and under-applied overhead is closed directly to cost of goods sold. If income under absorption costing for the year is $140,000, what was the net Income under the variable costing method assuming that overhead was applied to production using a rate based on normal production? Select one: 0 a. $168,000 O b. $112,000 0 c. $140,000 d. $245,000
Fey Company has the following information: Variable production costs Fixed OH production costs Variable selling & admin Fixed selling & admin Normal annual production Budgeted annual production Actual annual production Actual annual sales Beginning inventory $14 per unit $140.000 per year $7 per unit $112.000 per year 20.000 units 19.000 units 15.000 units 19.000 units 5.000 units The company uses the FIFO inventory method. Over- and under-applied overhead is closed directly to cost of goods sold. If income under absorption costing for the year is $140,000, what was the net Income under the variable costing method assuming that overhead was applied to production using a rate based on normal production? Select one: 0 a. $168,000 O b. $112,000 0 c. $140,000 d. $245,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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answer in text form please (without image), Note: .Every entry should have narration please
Transcribed Image Text:Fey Company has the following information:
Variable production costs
Fixed OH production costs
Variable selling & admin
Fixed selling & admin.
Normal annual production
Budgeted annual production
Actual annual production
Actual annual sales
Beginning inventory
$14 per unit
$140.000 per year
$7 per unit
$112.000 per year
20.000 units
19,000 units
15.000 units
19,000 units
5.000 units
The company uses the FIFO inventory method. Over- and under-applied overhead is closed directly to cost of goods sold.
If income under absorption costing for the year is $140,000, what was the net income under the variable costing method assuming that overhead was applied to production using a rate based on normal production?
Select one:
a. $168,000
о
b. $112,000
0
c. $140,000
о
d. $245,000
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