Determine operating income

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Question - Kwan Manufacturing Company data for 20X0 follow:

Sales: 11,000 units at $19 each

Actual production 15,500 units

Expected volume of production 15,000 units

Manufacturing costs incurred Variable $124,000

Fixed 54,000

Nonmanufacturing costs incurred Variable $ 11,000

Fixed 17,800

Variable overhead ¥14,400,000

Fixed overhead 27,250,000

Total overhead ¥41,650,000

Required -

1. Determine operating income for 20X0, assuming the firm uses the variable-costing approach to product costing.

2. Assume that there is no January 1, 20X0, inventory; no variances are allocated to inventory; and the firm uses a "full absorption" approach to product costing. Compute (a) the cost assigned to December 31, 20X0, inventory, and (b) operating income for the year ended December 31, 20X0.

Reference no: EM133070784

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