Use the following data to answer the question Using absorption costing, what is

Question

Use the following data to answer the question

Using absorption costing, what is the net income in March is each unit sells for $3600?

Use the following data to answer the question

January February March Unit Data       Beginning Inventory 0       ?       ?       Production 1200 900 1000       Sales 700 800 1000 variable costs       manufacturing cost per unit produced $900 $900 $900       marketing cost per unit sold $600 $600 $600 Fixed costs    Manufacturing costs $450,000 $450,000 $450,000    Marketing costs $140,000 $140,000 $140,000

Using absorption costing, what is the net income in March is each unit sells for $3600?

if this same question was stated with FIFO, what would the difference be if any?  Thanks

Explanation / Answer

no there will be no differnece if stated by fifo.

calculation $ sales 3600*1000 3600000 VARIBLE COST 1000*900 900000 FIXED COST 450000 450000 OPENING STOCK (1260000/900)600 840000 CLOSING STOCK (1350000/1000)600 -810000 COGS 1380000 fixed selling cost 140000 140000 variable selling cost 600*1000 600000 cost of sales 2120000 net income sales-cost of sales 1480000

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