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pentagon [3]
2 years ago
9

Barry's Hobbies produces and sells a luxury animal pillow for $80.00 per unit. In this month of operation, 3,000 units were prod

uced (2,800 were budgeted) and 2,750 units were sold. Barry’s uses FIFO and per-unit costs for beginning inventory are available below. Actual fixed costs are the same as the amount budgeted for the month. The allocation base for overhead is units. There is no inventory of direct materials or work in process. Other information for the month includes:
Variable manufacturing costs $38 per unit
Variable marketing costs $ 2 per unit
Fixed manufacturing costs $60,000 per month
Administrative expenses, all fixed $12,000 per month
Ending inventories:
Direct materials -0-
WIP -0-
Finished goods 750 units
What is operating income when using absorption costing?
Business
1 answer:
Vika [28.1K]2 years ago
4 0

Answer:

Net operating income= 43,000

Explanation:

Giving the following information:

Selling price= $80

Production= 3,000 units

Sales= 2,750 units

Variable manufacturing costs $38 per unit

Variable marketing costs $ 2 per unit

Fixed manufacturing costs $60,000 per month

Administrative expenses, all fixed $12,000 per month

Ending inventories:

Finished goods 750 units

<u>Under the absorption costing method, the cost of goods sold includes the fixed manufacturing overhead. We need to calculate the unitary fixed overhead:</u>

Fixed unitary overhead= 60,000/3,000= $20 per unit

Income statement:

Sales= 2,750*80= 220,000

COGS= 2,750*(38 + 20)= (159,500)

Gross profit=  60,500

Variable marketing= 2,750*2= (5,500)

Administrative expenses= (12,000)

Net operating income= 43,000

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Answer and Explanation:

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6 0
3 years ago
Morgan is going to give a presentation on how to prepare a tax return. Which of the following would constitute a suitable thesis
sasho [114]

Answer:

The correct answer is a. Preparing a tax return is a fairly simple process, if you know what documents you need.

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4 0
3 years ago
Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 20
jek_recluse [69]

Answer:

a. 116.9 and the inflation rate was 16.9%

Explanation:

<u>Definition</u>

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CPI = (90/77) * 100

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3 years ago
Alain mire files a single tax return and has adjusted gross income of $304,000. his net investment income is $53,000. what is th
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Answer:

$2,014

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4 0
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