Answer:
Instructions are listed below
Explanation:
Giving the following information:
Beginning Finished Goods Inventory 110 units
During the accounting period:
Produced 190 units
Sold 300 units for $ 250 each.
All units incurred $ 75 in variable manufacturing costs
$ 22 in fixed manufacturing costs.
Hagman also incurred $ 7400 in Fixed Selling and Administrative Costs.
Absorption:
Cost of goods sold= (variable manufacturing costs + fixed manufacturing costs)*units sold= (75+22)*300= 29,100
Operating income= sales - cogs - fixed selling and administrative costs= 75000 - 29100 - 7400= $38,500
Variable:
Variable costs= 75*300= 22500
Operating income= sales - variable costs - fixed manufacturing costs (of production) - fixed selling and administrative costs=
Operating income= 75000 - 225000 - (22*190) - 7400= $40,920
