Question

Bellue Inc. manufactures a single product. Variable costing net operating income was $96,300 last year and its inventory decreased by 2,600 units. Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year

Answer 1

$93,700

Step-by-step explanation:

To get the absorption costing net operating income for last year, reconcile the Variable costing net operating income to absorption costing net operating income.

Reconciliation of Variable Costing Profit to Absorption Costing Profit

Variable costing net operating income $96,300

Less Fixed Assets in Beginning Inventory ($2,600)

Absorption costing net operating income $93,700