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Question - Betty DeRose, Inc. began its operations on January 1, 2018. Betty produces a single product and reported the following cost information for 2018 and 2019:
2018 2019
Variable costs per unit:
Direct materials $15 $19
Direct labor ? $16
Variable overhead $6 $8
Variable selling $3 $7
Fixed costs in total:
Fixed overhead ? $207,000
Fixed selling ? $108,000
In 2018, Betty produced 21,000 units and sold 14,000 units. In 2019, Betty produced 23,000 units and sold 27,000 units. The selling price per unit was $70 in both years. Using absorption costing, Betty's 2018 net income was $287,000 and its finished goods inventory at December 31, 2018 totaled $301,000. Using variable costing, Betty's 2018 gross profit was $448,000. Calculate the amount of fixed overhead cost incurred in 2018. Do not use decimals in your answer.
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