Jo companys single product sells for 50 per unit jo sold

Reference no: EM13589933

Jo Company's single product sells for $50 per unit. Jo sold 8,000 units in 2009, her first year of operation, and 8,000 units the second year. 10,000 units were produced the first year and 6,000 units the second year. Each unit required $11 of direct materials, $6 of direct labor, and $3 variable factory overhead. Fixed factory overhead totaled $120,000 each year. Selling and administrative expenses were $4 per unit, and annual fixed selling and administrative expenses totaled $70,000 each year.

(a)    What is the 2010 net income according to GAAP ?
(b)    What is the 2010 net income according to variable costing ?
(c)    Reconcile the differences between your answers in (a) and (b).

Reference no: EM13589933

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