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Naddik [55]
3 years ago
15

During its first year of operation Salon Manufacturing Company sold 1,200 units of inventory. Salon incurred variable product co

st of $6.50 per unit and $2,500 of fixed manufacturing overhead costs. The sales price of the products was $10.00 per unit. Salon uses absorption costing. Based on this information Salon will report net income of (Do not round intermediate calculations.)
Business
1 answer:
kotegsom [21]3 years ago
5 0

Answer:

Net Income under absorption costing =$1,700

Explanation:

<em>Absorption costing is a method of costing where production units and inventories are value at the full cost per unit. Here, fixed overheads are charged to  all units produced using an overhead absorption rate</em>

<em>The full cost per unit = D.mat cost + D.labour cost + Variable overheads+ Fixed overheads</em>

Overhead absorption rate = Overhead for the period/

Net Income = (1200 × $10) - (1200× $6.50) - 2,500

                  = $1,700

Net Income under absorption costing =$1,700

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The text discusses three areas a firm must be concerned with in order to keep their best and brightest employees from leaving. T
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3 years ago
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