Answer:
Net income= $432,000
Explanation:
Giving the following information:
Fixed overhead, $224,000.
The company produced 28,000 units, and sold 19,000 units, leaving 9,000 units in inventory at year-end.
Income calculated under variable costing is determined to be $360,000.
The difference between absorption costing and variable costing method is that the first one includes the fixed manufacturing cost in the unitary production cost. <u>Some of the fixed overhead is allocated into ending inventory increasing the net income for the period.</u>
Unitary fixed overhead= 224,000/28,000= $8
Fixed overhead in ending inventory= 8*9,000= $72,000
Net income= 360,000 + 72,000= $432,000
