Reference no: EM132460630

Steve's Burgers makes burger patties for large supermarket chains. The burgers are frozen and can last in storage for months. Cost information on the burgers is as follows: Meat used for burgers $220,000 Wages used to make burgers 100,000 Overhead of the factory - variable 50,000 - fixed 70,000 Office staff 60,000 Sales staff 120,000 Bob's salary 50,000 Steve made 400,000 burgers this past year but only sold 375,000 to his customers. He sells them for $1.60 per burger patty. Steve tells you that the office and sales staff are variable costs while his salary is fixed.

Instructions

Question a) Calculate Steve's income assuming he uses variable costing.

Question b) Calculate Steve's income assuming he uses absorption costing. Round the unit costs to cents (0.5 rounds to the next number)