Question: In 20x1, its first year of operations, K_not, Inc., manufactured 110,000 units of its single product, ties. Variable manufacturing costs were $6 per unit of product. Fixed manufacturing costs were $110,000 and are based on the production volume of 110,000 units. Knot sold 100,000 ties during the year at an average selling price of $10. Variable selling costs were 50 e per tie and fixed selling and administrative costs were $80,000.
A) What's Knot's operating income the absorption approach for 20x 1?
B) What's Horn Gren's operating income using the contribution approach for 20x 1?