Question - During the most recent year, Evans Company had operating income of $84,000 using absorption costing and $90,000 using variable costing. The fixed manufacturing overhead application rate was $6 per unit. If 22,000 units were produced last year, what were the unit sales for last year? Hint: remember we are looking for number of units sold last year, not the dollar sales.
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Selling Price
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$92
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Units in Beginning Inventory
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0
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Units Produced
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8,700
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Units Sold
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8,300
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Units in Ending Inventory
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400
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Variable Costs per Unit:
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Direct Materials
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$13
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Direct Labour
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$55
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Variable Manufacturing Overhead
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$1
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Variable Selling and Administrative
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$5
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Fixed Costs:
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Fixed Manufacturing Overhead
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$130,500
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Fixed Selling and Administrative
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$8,300
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Barron Company, which has only one product, has provided the following data concerning its most recent month of operations:
a) What was the unit product cost for the month under variable costing?
b) What was the unit product cost for the month under absorption costing?
c) What was the operating income(loss) for the month under variable costing?
d) What was the operating income(loss) for the month under absorption costing?
e) What was the amount of fixed overhead cost in ending inventory under absorption costing?