Question

Laura, Inc. manufactures and sells one product. The following information pertains to each of the company's first two years of operations:

Selling price per unit	$200
Variable costs per unit:
Manufacturing:
Direct materials	$86
Direct labor	$40
Variable manufacturing overhead	$11
Variable selling and administrative expense	$5
Fixed costs per year:
Fixed manufacturing overhead	$49,000
Selling and administrative expense	$97,500

Year	1	2
Production (units)	5,000	4,600
Sales (units)	4,500	5,100

Q.) What is net operating income under absorption costing in Year 2? (Do not round intermediate calculations. Round the final answer to the nearest dollars.)

Answer 1

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