Jack Company sells its product for $11,000 per unit. Variable costs per unit are: manufacturing, $6,000, and selling and administrative, $125. Fixed costs are: $30,000 manufacturing overhead, and $40,000 selling and administrative. There was no beginning inventory at 1/1/09. Production was 20 units per year in 2009-2011. Sales were 20 units in 2009, 16 units in 2010, and 24 units in 2011. Income under absorption costing for 2010 is: A) $8,000. B) $14,000. C) $16,000. D) $22,000.
Jack Company sells its product for $11,000 per unit. Variable costs per unit are: manufacturing, $6,000, and selling and administrative, $125. Fixed costs are: $30,000 manufacturing overhead, and $40,000 selling and administrative. There was no beginning inventory at 1/1/09. Production was 20 units per year in 2009-2011. Sales were 20 units in 2009, 16 units in 2010, and 24 units in 2011. Income under absorption costing for 2010 is: A) $8,000. B) $14,000. C) $16,000. D) $22,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Jack Company sells its product for $11,000 per unit. Variable costs per unit are: manufacturing,
$6,000, and selling and administrative, $125. Fixed costs are: $30,000 manufacturing
overhead, and $40,000 selling and administrative. There was no beginning inventory at 1/1/09.
Production was 20 units per year in 2009-2011. Sales were 20 units in 2009, 16 units in 2010,
and 24 units in 2011. Income under absorption costing for 2010 is:
A) $8,000.
B) $14,000.
C) $16,000.
D) $22,000.
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