The fixed overhead budgeted for Hamlet Company at an expected capacity of 500,000 units is $1,500,000. Variable
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The fixed overhead budgeted for Hamlet Company at an expected capacity of 500,000 units is $1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net income at year-end. Data collected over the last three years show the following:
Determine the adjustment each year to convert the variable costing income to absorption costing net income. Compute the absorption costing net income for eachyear.
Transcribed Image Text:
Units produced Units sold . Net income-(variable cost) $ First Year 502,000 496,000 $500,000 Second Year 498,000 503,000 $521,000 Third Year 495,000 495,000 $497,000
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