Im lost...... Use the following data to answer the question Using absorption cos

Question

Im lost......

Use the following data to answer the question

Using absorption costing, how much fixed manufacturing cost is expensed on the February income statement?

Use the following data to answer the question

January February March Unit Data       Beginning Inventory 0       ?       ?       Production 1300 900 1000       Sales 600 800 1000 variable costs       manufacturing cost per unit produced $900 $900 $900       marketing cost per unit sold $600 $600 $600 Fixed costs    Manufacturing costs $450,000 $450,000 $450,000    Marketing costs $140,000 $140,000 $140,000

Using absorption costing, how much fixed manufacturing cost is expensed on the February income statement?

Correct Answer: 292,308 Use the following data to answer the question

Explanation / Answer

CALCULATION OF Fixed manufacturing cost is expensed on the February income statement

OPENING STOCK : 700

FIXED MANUF COST OF OPENING STOCK OF FEB=(450000/1300)*700=242308

UNIT PRODUCED IN FEBRUARY: 900

SALES: 800

CURRENT MONTH PROD USED: 100

FIXED MANUF COST OF FEBRUARY: 450000

FIXED MANUF COST OF SALES OF FEB =(450000/900)*100=50000

THUS, TOTAL FIXED MANUF COST = 242308+50000 = 292308

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