Question: Entel Corporation creates an accounting computer program. This year, Entel Corporation produced 20,000 units of their program and sold 22,000 units. Each unit sells for

Entel creates an accounting computer program. This year, Entel produced 20,000 units of their program and sold 22,000 units. Each unit sells for $250. Selected operational and financial data are shown below.
Variable costs per unit:
Direct materials .......$ 15.00
Direct labor ......... 40.00
Manufacturing overhead .... 5.00
Selling and administrative ... 2.00
Fixed costs per unit:
Manufacturing overhead ...$200,000
Selling and administrative ... $150,000

Required
A. Calculate Entel’s net income using absorption costing.
B. Will income be higher or lower if calculated using variable costing?
C. By how much?

Step by Step Solution

★★★★★

3.45 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A Income using absorption costing would be 3766000 calcu... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

420-B-M-A-V-C (535).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Will U.S. interest rates be higher or lower than Japanese interest rates and will interest rate parity hold? Why or why not? Suppose that the inflation rate is lower in Japan than it is in the United...

Consider the following information: Each unit sells for $500. Regular production and overtime production costs are $350 and $450 per unit, respectively. The cost to hold a unit in inventory for one...

Crux, Inc., produces amplifiers. Each unit sells for $900. Below is information on production/sales and costs for 2020: Required a. Use the high-low method to identify the fixed and variable cost...

Entel Corporation creates an accounting computer program. This year, Entel Corporation produced 20,000 units of its program and sold 22,000 units. Each unit sells for $250. Selected operational and...

Please help with assignment 2 MAC2601. assignment attched MAC2601/103/1/2016 Tutorial letter 103/1/2016 Principles of Management Accounting MAC2601 Semester 1 Department of Management Accounting...

Montonya Company has the following selected data for the current year: Sales (10,000 units) $90,000 Direct materials 30,000 Direct labor costs 10,000 Variable manufacturing overhead 3,500 Fixed...

A business owner in England signs a 15% discount note for 30,000 English pounds with a bank in London if the proceeds are 28,835.16 find the time of the note in days

A bike company offer a 3 year warranty on all their products. If minor defects happened in all their products sold, repair costs would be $2m, If major defects occurred for all products sold, it...

In the simple Keynesian model, an increase of 1 dollar in tax will cause equilibrium income to decrease by only a fraction (b) of this 1-dollar increase. Explain the process by which this happens.

In what ways do you think the strengths and weaknesses of the HR department in this case should be analyzed?

Suppose EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as RP with APP of $4M plus 5M shares of common stock. (We refer to this basket of RP plus...

Same setup as Exercise 14.1, except that now EBV is considering two additional structures: Alternative I: A 2X liquidation preference on the RP; or Alternative II: A cumulative compound dividend of...

Suppose EBV is considering a $5M Series A investment in Newco. EBV proposes to structure the investment as 5M shares of CP. The employees of Newco have claims on 15M shares of common stock. Following...

The WBG [World Bank Group] and IFC [International Finance Corporation] estimate the finance gap among formal and informal MSMEs [Micro, Small and Medium Enterprises] to be 18 percent and 11 percent...

J. Smythe, Inc., manufactures fine furniture. The company is deciding whether to introduce a new mahogany dining room table set. The set will sell for $6,400, including a set of eight chairs. The...

The face value of a bond is $68,000, its stated rate is 7%, and the term of the bond is five years. The bond pays Interest semiannually. At the time of issue, the market rate is 8%. Determine the...