In the first year of business, Shalton Inc. produced 55,000 products. During its first year, the company sold 50,000 products. Costs incurred during the year were as follows:

The products were sold for \(\$ 20\) per unit.

a. What was income before tax under variable costing?

b. What was income before tax under absorption costing?

c. What was income before tax under variable costing assuming instead that all 55,000 products were sold?

d. What was income before tax under absorption costing assuming instead that all 55,000 products were sold?

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Ingredients used...... Direct labor.... Variable overhead Fixed overhead..... Variable selling expenses. Fixed selling and administrative expenses.. Total actual costs $280,000 120,000 205,000 110,000 25,000 1,000 $741,000