Question

Helmers Corporation manufactures a single product. Variable costing net operating income last year was $103,000 and this year was $123,500. Last year, $38,400 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $14,500 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year

Answer 1

Answer:

$64,600

Explanation:

Given that

Variable costing net operating income last year = $1,03,000

Fixed manufacturing overhead costs = $38,400

The computation of net operating income is as shown below:-

= Variable cost - Overhead cost

= $1,03,000 - $38,400

= $64,600

So, from the above calculation we simply deduct Variable cost from Overhead cost.