Question:Financial Account The Parsons Company experienced the following costs in 2007: Direct materials Direct labor $4.50/unit $8.00/unit Manufacturing Overhead Costs Variable $2.00/unit $ 1,50,000 Fixed Selling & Administrative Costs Fixed selling Variable selling Fixed administrative $ 15,000 $1.50/unit $ 10,000 During the year the company manufactured 60,000 units and sold 55,000 units. If net income for the year was $114,000 using full costing, what would the net income be if the company used variable costing? Assume no beginning inventories.
Question:Financial Account The Parsons Company experienced the following costs in 2007: Direct materials Direct labor $4.50/unit $8.00/unit Manufacturing Overhead Costs Variable $2.00/unit $ 1,50,000 Fixed Selling & Administrative Costs Fixed selling Variable selling Fixed administrative $ 15,000 $1.50/unit $ 10,000 During the year the company manufactured 60,000 units and sold 55,000 units. If net income for the year was $114,000 using full costing, what would the net income be if the company used variable costing? Assume no beginning inventories.
Chapter5: Process Costing
Section: Chapter Questions
Problem 14EA: A production department within a company received materials of $10,000 and conversion costs of...
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
Transcribed Image Text:Question:Financial Account
The Parsons Company experienced the following costs in
2007:
Direct materials
Direct labor
$4.50/unit
$8.00/unit
Manufacturing Overhead Costs
Variable
$2.00/unit
$ 1,50,000
Fixed
Selling & Administrative Costs
Fixed selling
Variable selling
Fixed administrative
$ 15,000
$1.50/unit
$ 10,000
During the year the company manufactured 60,000 units
and sold 55,000 units.
If net income for the year was $114,000 using full costing,
what would the net income be if the company used
variable costing? Assume no beginning inventories.
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