Peak Manufacturing produces snow blowers. The selling price per snow blower is $

Question

Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are as follows.

Direct material per unit: $20
Direct labor per unit: 12
Variable manufacturing overhead per unit: 10
Fixed manufacturing overhead per year: $148,500

In addition, the company has fixed selling and administrative costs of $150,000 per year.

During the year, Peak produces 45,000 snow blowers and sells 30,000 snow blowers. How much is net income, using full costing?
       $1,641,000
       $1,590,000
       $1,441,500
       $1,491,000 Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are as follows.

Direct material per unit: $20
Direct labor per unit: 12
Variable manufacturing overhead per unit: 10
Fixed manufacturing overhead per year: $148,500

In addition, the company has fixed selling and administrative costs of $150,000 per year.

During the year, Peak produces 45,000 snow blowers and sells 30,000 snow blowers. How much is net income, using full costing?

Explanation / Answer

$1,441,500

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