Moving to another question will save this response Question 44 Lukin Corporation

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Moving to another question will save this response Question 44 Lukin Corporation reports the following first year production cost information Units produced 9,000 units per unit 1 per unit price Direct labor Direct materíals per Variable overhead Fixed overhead 340,000 in total Operating expenses 1,000,000 Complete the requirements below, showing as much of your work as is practical a-Compute production cost per unit under variable costing b-Compute production cost per unit under abs orption costing c-Determine the net income using variable costing d-Determine the net income using absorption costing e-Using the elements of the fraud triangle, explain the ethical dilemma faced when managers are given a bonus based on GAAP (absorption) basis net income

Explanation / Answer

a.) Production cost per unit under variable costing is:

= 41+15+(9300000/62000)

= 41 +15+150

= $206

b.) Production cost per unit under Absortion costing :

= 41+15+150+ (4340000/62000)

=41+15+150+70

= $276

Operating expense are not relevant to computation of unit product cost.

C.) Net income under variable costing :

= 59000*(350-206)-4340000-1000000

= $ 3,156,000

d.) Net income under Absortion costing :

= 59000*(350-276)-1000000

= $ 3,366,000

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