Rhea Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 67 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 10 Direct labor $ 5 Variable manufacturing overhead $ 3 Fixed manufacturing overhead per year $ 252,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 65,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 9,000 7,000 Units sold during the year 8,000 7,000 Units in ending inventory 1,000 1,000 The net operating income (loss) under absorption costing in Year 2 is closest to
Rhea Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 67 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 10 Direct labor $ 5 Variable manufacturing overhead $ 3 Fixed manufacturing overhead per year $ 252,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 65,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 9,000 7,000 Units sold during the year 8,000 7,000 Units in ending inventory 1,000 1,000 The net operating income (loss) under absorption costing in Year 2 is closest to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rhea Corporation has provided the following data for its two most recent years of operation:
| Selling price per unit | $ | 67 |
| Variable manufacturing cost per unit produced: | ||
| Direct materials | $ | 10 |
| Direct labor | $ | 5 |
| Variable manufacturing |
$ | 3 |
| Fixed manufacturing overhead per year | $ | 252,000 |
| Selling and administrative expenses: | ||
| Variable selling and administrative expense per unit sold | $ | 4 |
| Fixed selling and administrative expense per year | $ | 65,000 |
| Year 1 | Year 2 | |
| Units in beginning inventory | 0 | 1,000 |
| Units produced during the year | 9,000 | 7,000 |
| Units sold during the year | 8,000 | 7,000 |
| Units in ending inventory | 1,000 | 1,000 |
The net operating income (loss) under absorption costing in Year 2 is closest to:
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