Answered

Discover answers to your most pressing questions at Westonci.ca, the ultimate Q&A platform that connects you with expert solutions. Our Q&A platform offers a seamless experience for finding reliable answers from experts in various disciplines. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Cagney Industries has the following cost information for the year just ended: Direct materials $ 1.00 per unit Direct labor $ 2.00 per unit Variable manufacturing overhead $ 1.50 per unit Fixed manufacturing overhead $ 30,000 Variable selling and administrative cost $ 0.50 per unit Fixed selling and administrative cost $ 25,000 During the year, Cagney produced 6,000 units, out of which 5,400 were sold for $20 each. What is net income under absorption costing

Sagot :

ayokenny2001

Answer:

$29,000

Explanation:

First, we need to calculate the unitary cost value

Unit cost value = ($1 + $2 + $1.5) + $30,000/6,000 = $9.5

Sales = 5,400 × $20 = $108,000

Less:

COGS = $9.5 × 5,400 = ($51,300)

Gross profit = $56,700

Less:

Total administrative costs = ($0.5 × 5,400) + $25,000 = ($27,700)

Net operating income = $29,000

Thank you for visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.