Answer:
Sales 3,575,000
Variable Manufacturing 1,567,500
Fixed Manufacturing <u> 247,500</u>
COGS: 1,815,000
gross profit 1,760,000
Variable S&A expense 302,500
Fixed S&A expense <u> 191,250 </u>
Net Income 1,266,250
Explanation:
Absorption cost will consider unit cost only the manufacturing department cost the rest are period cost.
We solve for the fixed overhead per unit using produced units:
Fixed overhead $382,500 / 85,000 = 4.5
Then we add it to the variable cost of 28.5 and get a unit cost of $33
Wer multiply by the 55,000 units to get COGS
the rest will be period cost.
