Problem: Hellman Manufacturing has the following cost information available for 2012:
Direct materials $6.00 per unit
Direct labor $4.00 per unit
Variable manufacturing overhead $2.00 per unit
Variable selling and administrative costs $1.00 per unit
Fixed manufacturing overhead $80,000
Fixed selling and administrative costs $25,000
During 2012, Merriman produced 12,500 units out of which 11,000 units were sold for $60 each.
I want help in answering these questions:
A. Calculate Hellman's net operating income assuming the company uses variable costing.
B. Calculate Hellman's net operating income assuming the company uses absorption costing.