Question

Units Produced 20,000

Units Sold 17,000
Unit Sales Price $ 240

Manufacturing Cost Per Unit
Direct Material $30
Direct Labor $30
Variable Manufacturing Overhead $17
Fixed Manufacturing Overhead ($400,000/20,000) = $ 20
Full Manufacturing Cost Per Unit $97

Nonmanufacturing Costs
Variable Selling Expenses $ 71,000
Fixed General and Administrative Costs $ 88,000

What is Jasper Enterprise's income under absorption costing?

Answer 1

Instructions are below.

Step-by-step explanation:

Giving the following information:

Units Produced 20,000

Units Sold 17,000

Unit Sales Price $ 240

Full Manufacturing Cost Per Unit $97

Under the absorption costing method, the fixed manufacturing overhead is part of the product cost.

Income statement:

Sales= (17,000*240)= 4,080,000

Cost of goods sold= (17,000*97)= (1,649,000)

Gross profit= 2,431,000

Variable Selling Expenses= (71,000)

Fixed General and Administrative Costs= (88,000)

Net operating income= 2,272,000