21,3

Exercise 21-26B Computing absorption costing income LO P5 A manufacturer reports the information below for three recent years. Variable costing income Beginning finished goods inventory (units) Ending finished goods inventory (units) Fixed manufacturing overhead per unit Year 1 Year 2 Year $110,000 $114,400 $118,950 0 1,200 700 1,200 700 $ 2.50 $ 2.50 $ 2.50 800 Compute income for each of the three years using absorption costing. (Amounts to be deducted sh sign.) Year 1 Year 2 Year 3 Variable costing income Fixed overhead in ending inventory Fixed overhead in beginning inventory Absorption costing income 0 $ 0 S