Plummer Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 44 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 9 Direct labor $6 Variable manufacturing overhead $ 4 Fixed manufacturing overhead per year $63,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 5 Fixed selling and administrative expense per year $66,000 Year 1 Year 2 Units in beginning inventory 0 2,000 Units produced during the year 9,000 7,000 Units sold during the year 7,000 8,000 Units in ending inventory 2,000 1,000 The net operating income (loss) under absorption costing in Year 2 is closest to: a. $92,000 b. $132,000 c. $26,000 d. $31,
Plummer Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 44 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 9 Direct labor $6 Variable manufacturing overhead $ 4 Fixed manufacturing overhead per year $63,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 5 Fixed selling and administrative expense per year $66,000 Year 1 Year 2 Units in beginning inventory 0 2,000 Units produced during the year 9,000 7,000 Units sold during the year 7,000 8,000 Units in ending inventory 2,000 1,000 The net operating income (loss) under absorption costing in Year 2 is closest to: a. $92,000 b. $132,000 c. $26,000 d. $31,
Chapter1: Financial Statements And Business Decisions
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Standard Costing
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:Plummer Corporation has provided the
following data for its two most recent years of
operation: Selling price per unit $ 44
Manufacturing costs: Variable manufacturing
cost per unit produced: Direct materials $9
Direct labor $ 6 Variable manufacturing
overhead $ 4 Fixed manufacturing overhead
per year $63,000 Selling and administrative
expenses: Variable selling and administrative
expense per unit sold $ 5 Fixed selling and
administrative expense per year $66,000 Year
1 Year 2 Units in beginning inventory 0 2,000
Units produced during the year 9,000 7,000
Units sold during the year 7,000 8,000 Units
in ending inventory 2,000 1,000 The net
operating income (loss) under absorption
costing in Year 2 is closest to: a. $92,000 b.
$132,000 c. $26,000 d. $31,
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