Question: Selling price per unit $12.00 Variable manufacturing cost per unit $6.50 Variable selling and administrative cost per unit $1.25 Fixed selling and administrative expense $150,000

Selling price per unit $12.00

Variable manufacturing cost per unit $6.50

Variable selling and administrative cost per unit $1.25

Fixed selling and administrative expense $150,000

Beginning inventory last year 0 units

Production last year 240,000 units

Sales last year 233,500 units

Production this year 200,000 units

Sales this year 203,000 units

Fixed manufacturing cost per unit last year $2.00

  • Fixed manufacturing overhead in total has not changed from last year.

  1. What is this year's net operating income using absorption costing under FIFO costing?
  2. What is this year's net operating income using variable costing?

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