Galaxy, Inc., a manufacturer of telescopes, began operations on June 1 of the current year. During this time, the company produced 60,000 units and sold 40,000 units at a sales price of $600 per unit. Cost information for this year is shown in the following table: Production costs Direct materials $ 90 per unit Direct labor $ 75 per unit Variable overhead $ 4 per unit Fixed overhead $ 420,000 in total Non-production costs Variable selling and administrative $ 80,000 in total Fixed selling and administrative $ 520,000 in total Given the Galaxy, Inc. data, what is net income using absorption costing?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Galaxy, Inc., a manufacturer of telescopes, began operations on June 1 of the current year. During this time, the company produced 60,000 units and sold 40,000 units at a sales price of $600 per unit. Cost information for this year is shown in the following table:
| Production costs | |||
| Direct materials | $ | 90 | per unit |
| Direct labor | $ | 75 | per unit |
| Variable overhead | $ | 4 | per unit |
| Fixed overhead | $ | 420,000 | in total |
| Non-production costs | |||
| Variable selling and administrative | $ | 80,000 | in total |
| Fixed selling and administrative | $ | 520,000 | in total |
Given the Galaxy, Inc. data, what is net income using absorption costing?
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