Determine hasselbacks profit using unit-variable costing

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Reference no: EM13502334

Hasselback, Inc., produced 175,000 units and prepared the following income report using absorption costing (numbers in $1,000s):

Sales (100,000 Units)

 

$15,000

Less Cost of Goods Sold

 

 

   Direct Materials

$1,200

 

   Direct Labor

300

 

   Unit-related overhead

900

 

   Other overhead

4,000

6,400

Gross Margin

 

8,600

Less other operating costs

 

 

   Variable Selling & Administrative

 

600

   Fixed Selling & Administrative

 

2,000

Profit

 

$6,000

Required:

1.   Determine Hasselback's profit using unit-variable costing.

2.   Determine Hasselback's profit using throughput costing.

3.   Which method do you think presents the most reliable picture of current earnings?  Why?

Reference no: EM13502334

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