Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 73 Direct labor $ 50 Variable manufacturing overhead $ 11 Sales commission $ 8 Fixed selling and administrative expense $ 110,000 Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the net operating income for the second year of operations? Multiple Choice $130,000 $110,000 $160,000 $140,000

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 14EA: Cool Pool has these costs associated with production of 20,000 units of accessory products: direct...
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Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 73 Direct labor $ 50 Variable manufacturing overhead $ 11 Sales commission $ 8 Fixed selling and administrative expense $ 110,000 Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the net operating income for the second year of operations?

Multiple Choice

$130,000

$110,000

$160,000

$140,000

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where did the fixed sellind and admin $110,000 come from

 

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