TTF, Inc., which just began this year, has the following information about JJl,

Question

TTF, Inc., which just began this year, has the following information about JJl, the only product that it produces and sells. JJl sells for $25 per unit. During the current year, 20,000 units of JJl were sold. During the period, TTF manufactured 22,000 units of JJl. The following costs were available: variable costs per unit: direct materials-$8; direct labor-$4; variable manufacturing overhead-$2; variable selling-$3. The indirect fixed costs for TTF were manufacturing costs $55,000 and marketing $33,000. What is the income for the period under variable costing?

Explanation / Answer

Sales    20000units @$25 each $500,000 cost of goods sold cost of goods manufactured 22000@$14 $308,000 Less:ending inventory    2000*14 $28,000 $280,000 variable selling expenses 20000*3 $60,000 cost of goods sold $340,000 Gross margin $160,000 Fixed costs $88,000 Net income $72,000

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