Calculate the amount of net income under variable costing

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Question - Peterson Corporation produces a single product. The company had no beginning inventory and they produced 70,000 units during 2021 and sold 60,000 units. The operating data for 2021 follow:

Sales $1,380,000

Manufacturing costs:

Direct Materials 294,000

Direct Labor 182,000

Variable manufacturing overhead 273,000

Fixed manufacturing overhead 150,500

Selling & Administrative expenses:

Fixed 140,000

Variable 258,000

Required -

A) Calculate the value of the ending finished goods inventory under variable costing.

B) Calculate the amount of net income under variable costing.

C) Calculate the amount of net income under absorption coating.

D) Explain in detail why the net income differs under the two accounting methods.

Reference no: EM133084916

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