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During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials,...

During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $290,000. The company produced 29,000 units, and sold 19,500 units, leaving 9,500 units in inventory at year-end. Income calculated under variable costing is determined to be $365,000. How much income is reported under absorption costing?

Multiple Choice

  • $365,000

  • $460,000

  • $329,000

  • $655,000

  • $270,000

    Jeter Corporation had net income of $229,000 based on variable costing. Beginning and ending inventories were 7,700 units and 13,400 units, respectively. Assume the fixed overhead per unit was $4 for both the beginning and ending inventory. What is net income under absorption costing?

    Multiple Choice

  • $313,400

  • $229,000

  • $274,600

  • $251,800

  • $282,600

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