Net Income: Net income is that income of a company which is calculated by deducting all expenses such as interest, depreciation and taxes from the revenue. Net income is derived with the help of income statement of the company. To explain: Net income of a company is totally different from its cash and cash equivalents.

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Chapter 6, Problem 11DQ

To determine

Net Income:

Net income is that income of a company which is calculated by deducting all expenses such as interest, depreciation and taxes from the revenue. Net income is derived with the help of income statement of the company.

To explain: Net income of a company is totally different from its cash and cash equivalents.

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Kubin Company’s relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 4.20 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 5.20 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.70 Sales commissions $ 1.20 Variable administrative expense $ 0.70 Required: For financial accounting purposes, what is the total product cost incurred to make 12,500 units? For financial accounting purposes, what is the total period cost incurred to sell 12,500 units? For financial accounting purposes, what is the total product cost incurred to make 14,000 units? For financial accounting purposes, what is the total period cost incurred to sell 11,000 units?

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