Bellue Inc. manufactures a single product. Variable costing net operating income was $98,200 last year and its inventory decreased by 2,700 units. Fixed manufacturing overhead cost was $3 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

Question

Business

Andrew Byrd

8 September, 02:44

Bellue Inc. manufactures a single product. Variable costing net operating income was $98,200 last year and its inventory decreased by 2,700 units. Fixed manufacturing overhead cost was $3 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

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Answers (1)

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Richard Dougherty · Answer 1

Absorption costing net operating income$90,100

Explanation:

Bellue Inc.

Variable costing net operating income$98,200

Less fixed manufacturing overhead costs released from inventory

under absorption costing (2,700 units * 3 per unit) (8,100)

Absorption costing net operating income $90,100