Quasimod Quasimodo\'s operations for the year just ended: Qusimodo Company roduc
ID: 2412735 • Letter: Q
Question
Quasimod Quasimodo's operations for the year just ended: Qusimodo Company roduces and sclil only one product. The following data relates to $121 Selling price per unit Units in beginning finished goods inventory. Units produced... Units sold Units in ending finished goods inventory. 4,300 4,000 300 Variable costs per unit: Direct materials. Direct labor.. $44 $35 $7 $5 Variable manufacturing overhea... Variable selling and administrative.. Fixed costs: Fixed manufacturing overhead... $34,400 $72,000 Rived celling and administrativeExplanation / Answer
1. Operating Income under Variable Costing System
Operating Income = Sales - Variable Expenses - Fixed Expenses
Operating Income = 4000 * $121 - 4000 * $91 - $34400 - $72000
Operating Income = $13600
2. Operating Income under Absorption Costing System
Operating Income = Sales - Variable Expenses - Fixed Expenses
Operating Income = 4000 * $121 - 4000 * $99 - $72000
Operating Income under Absorption COsting System = $16000