- Etters Manufacturing Company has provided the followingfinancial data for its most recent month.
Unit Selling Price | $18 |
Units in beginning inventory | 0 |
Units produced | 10,000 |
Units sold | 9,500 |
Variable costs per unit: | |
Direct materials | $6 |
Direct labor | $4 |
Manufacturingoverhead | $3 |
Selling andadministrative costs | $1 |
Fixed costs: | |
Manufacturingoverhead | $12,000 |
Selling andadministrative costs | $8,000 |
Required:
Prepare an income statement using anabsorption costing format.
LO2
Solution:
Sales $171,000
Less cost of goods sold:
Variablemanufacturing $123,500
Fixedmanufacturing 11,400 134,900
Grossprofit 36,100
Less selling and administrativeexpenses
Variable 9,500
Fixed 8,000 17,500
Net operatingincome $ 18,600
How is the 11,400 (fixedmanufacturing) calculated??
