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Artist 52 [7]
3 years ago
13

For the month ended October 31st, there are no finished goods or work in process inventories at the beginning of the month for t

he Fleetfoot Company. Net sales $8,400 Product costs: Variable 3,780 Fixed 1,890 Selling and Administrative costs: Variable 588 Fixed 840 Units manufactured 210 Units sold 180 Under absorption costing, Fleetfoot's operating income for the year is: A. $1,014 B. $2,002 C. $2,112 D. $1,842
Business
1 answer:
Alexeev081 [22]3 years ago
4 0

Answer:

C. $2,112

Explanation:

Under <em>absorption costing</em>, cost of a finished product will include the costs of direct materials , direct labor , variable and fixed manufacturing overhead.

Solution:

Determine first the <em>cost of sales</em>:

Variable product cost $3,780  + Fixed product cost $1,890  = $5,670

Total product cost $5,670 ÷ 210 units manufactured = $27/unit

$27 per unit cost × 180 units sold = $4,860 cost of sales

Then,

Net Sales $8,400 - Cost of Sales $4,860 = $3,540 Profit

Profit $3,540 - Selling/Admin variable & fixed costs $1,428 = <u>$2,112 Net operating income</u>

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23,130,000 HK

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= 114,480,000 HK

Net profit earned = Amount Earned - Amount Repaid

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Net profit earned in Euros = (23,130,000 ÷ 7.5) euros

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Role of a veterinary doctor in rearing livestock effectively
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