What is the net operating income for the month under absorption costing?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $ 78
Units in beginning inventory 0
Units produced 8,800
Units sold 8,700
Units in ending inventory 100
Variable costs per unit:
Direct materials $ 18
Direct labor $ 10
Variable manufacturing
Variable selling and administrative expense $ 5
Fixed costs:
Fixed manufacturing overhead $ 255,200
Fixed selling and administrative expense $ 87,000
What is the net operating income for the month under absorption costing?
$11,300
$17,400
$14,500
$2,900
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