Question 25 The Colin Division of Mochrie Company sells its product for $31 per unit. Variable costs per unit are: manufacturing, $10; and selling and administrative, $2. Fixed costs are: $320000 manufacturing overhead, and $57000 selling and administrative. There was no beginning inventory. Expected sales for next year are 40000 units. Ryan Stiles, the manager of the Colin Division, is under pressure to improve the performance of the Division. As he plans for next year, he has to decide whether to produce 40000 units or 50000 units. What would the net income be under absorption costing for each alternative? 40000 units $383000 $383000 $383000 $447000 50000 units $383000 E $447000 $458400 $383000
Question 25 The Colin Division of Mochrie Company sells its product for $31 per unit. Variable costs per unit are: manufacturing, $10; and selling and administrative, $2. Fixed costs are: $320000 manufacturing overhead, and $57000 selling and administrative. There was no beginning inventory. Expected sales for next year are 40000 units. Ryan Stiles, the manager of the Colin Division, is under pressure to improve the performance of the Division. As he plans for next year, he has to decide whether to produce 40000 units or 50000 units. What would the net income be under absorption costing for each alternative? 40000 units $383000 $383000 $383000 $447000 50000 units $383000 E $447000 $458400 $383000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 25
The Colin Division of Mochrie Company sells its product for $31 per unit. Variable costs per unit are: manufacturing, $10; and selling and
administrative, $2. Fixed costs are: $320000 manufacturing overhead, and $57000 selling and administrative. There was no beginning inventory.
Expected sales for next year are 40000 units. Ryan Stiles, the manager of the Colin Division, is under pressure to improve the performance of the
Division. As he plans for next year, he has to decide whether to produce 40000 units or 50000 units. What would the net income be under
absorption costing for each alternative?
50000 units
40000 units
$383000
$383000
$383000
$447000
$383000
$447000
$458400
$383000
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