Answer:
Net operating income= 1,080,000
Explanation:
Giving the following information:
Units produced= 180,000
Variable manufacturing cost was $ 17 per unit produced.
The variable operating (nonmanufacturing) cost was $ 10 per unit sold.
Planned and actual fixed manufacturing costs were $ 900,000. Planned and actual fixed operating (nonmanufacturing) costs totaled $ 360,000.
Atlanta sold 120, 000 units of a product at $ 44 per unit.
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 900,000/180,000= $5
Unitary production cost= 17 + 5= 22
Sales= 120,000*44= 5,280,000
COGS= 22*120,000= (2,640,000)
Gross profit= 2,640,000
The variable operating ocsts= 120,000*10= (1,200,000)
Fixed operating costs= (360,000)
Giving the following information:
Units produced= 180,000
Variable manufacturing cost was $ 17 per unit produced.
The variable operating (nonmanufacturing) cost was $ 10 per unit sold.
Planned and actual fixed manufacturing costs were $ 900,000. Planned and actual fixed operating (nonmanufacturing) costs totaled $ 360,000.
Atlanta sold 120, 000 units of a product at $ 44 per unit.
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 900,000/180,000= $5
Unitary production cost= 17 + 5= 22
Sales= 120,000*44= 5,280,000
COGS= 22*120,000= (2,640,000)
Gross profit= 2,640,000
The variable operating ocsts= 120,000*10= (1,200,000)
Fixed operating costs= (360,000)
Net operating income= 1,080,000
