Peak, Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. At year-end, the company reported the following income statement using absorption costing. Sales (4,900  $90) $ 441,000 Cost of goods sold (4,900  $38) 186,200 Gross profit $ 254,800 Selling and administrative expenses 75,000 Income $ 179,800 Production costs per tennis racket total $38, which consists of $25 in variable production costs and $13 in fixed production costs (based on the 6,000 units produced). Ten percent of total selling and administrative expenses are variable. 

Compute net income under variable costing.

Answer rating: 100% (QA)

Peak Incorporated Net Income under Variable Costing Peak Incorporated uses absorption costing cur... View the full answer