Question: The fixed overhead budgeted for MacBeth Co. at an expected capacity of 500,000 units is $1,500,000. Variable costing is used internally, and the net income

The fixed overhead budgeted for MacBeth Co. 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.

Second First Year Yea Third Year 502,000 498,000 496,000 496,000 503,000 496,000 $500,000 $521,000 $497,000

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