Answer:
Instructions are listed below
Explanation:
Giving the following information:
Selling price= $215
Units in beginning inventory 0
Units produced 9,800
Units sold 9,300
Units in ending inventory 500
Variable costs per unit:
Direct materials $ 61
Direct labor 33
Variable manufacturing overhead 10
Variable selling and administrative 15
Total variable cost per unit $ 119
Fixed costs:
Fixed manufacturing overhead $ 274,400
Fixed selling and administrative 510,000
Total fixed costs $ 784,400
Absorption costing includes fixed manufacturing overhead in the cost per unit.
A) Unitary fixed manufacturing overhead= 274,400/9800 units= $28
Unitary cost= Direct materials + Direct labor + Variable manufacturing overhead + fixed manufacturing overhead
Unitary cost= 61 + 33 + 10 + 28= $132
B) Income statement:
Sales= 9300*215= $1,999,500
COGS= 132*9300=$1,227,600
Gross profit= $771,900
Total selling and administrative expense= 510,000 + 15*9300= 649,500
Net operating income= $122,400
