Remaining Time 1 hour 15 minutes 30 seconds w Question Compl

Remaining Time: 1 hour, 15 minutes, 30 seconds. w Question Completion Status: QUESTION 20 5 points Save Answer Ferrier Corporation, which has only one product, has provided the following data concerning its most recent month of operation: Selling price.. Units in beginning inventory Units produced.8,700 Units sold Units in ending inventory. Variable costs per unit: $92 8,300 400 ...$13 $55 Direct materia Direct labo. Variable manufacturing overhead... $1 Variable selling and administrativ.... $5 Fixed costs: $8,300 Fixed selling and administrative.. Save All Answers Save and Submit Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Solution

Answer:

Net income under absorption costing

$16,600

Working notes for the above answer is as under

Calculation of Net income under absorption costing

Sales ($92 * 8,300)

$763,600

Less: cost of goods sold

Material ($13* 8,300)

$107,900

Labour ($55 * 8,300)

$456,500

variable manufacturing overhead ($1 * 8,300)

$8,300

Fixed manufacturing overhead
($130500 / 8700 * 8,300)

$124,500

Gross profit

$66,400

Less:
variable selling and administrative expenses ($5* 8,300)

41500

Less: Fixed selling and administrative expense

8300

Net income under absorption costing

$16,600

Net income under absorption costing

$16,600