Answered

g Assume absorption costing net income is $42000, ending inventory consists of 1100 units, the variable overhead rate is $12 per unit, and the fixed overhead rate is $14 per unit. Determine the net income under variable costing.

Answer :

Answer:

$26,600

Explanation:

The computation of the net income under variable costing is shown below:

Net income under absorption costing $42,000

Less:

Fixed overhead cost (1,100 units × $14) -$15,400

Net income under variable costing $26,600

We simply deduct the fixed overhead cost from the absorption costing as the variable costing do not include any fixed overhead cost so the same is to be deducted

Other Questions