Question

Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records:
Sales price per unit ....... $ 103
Direct materials per unit...... $ 50
Direct labor per unit....... $ 16
Variable overhead per unit...... $ 10
Fixed overhead per unit...... $ 23
Fixed selling costs.......... $ 55,000
Variable selling costs....... $180,000
Beginning inventory ..... 0
Units produced .......... 100,000
Units sold .......... 90,000

Required
a. Under absorption costing, what is Regal’s operating income?
b. Under variable costing, what is Regal’s ending Finished Goods Inventory balance?



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  • CreatedFebruary 21, 2014
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