Production costs per leaf blower total 20 which consists of

Reference no: EM13595927

Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold 8,500. At year-end the company reported the following income statement using absorption costing.

Sales (8,500 x $45) 382,500
cost of goods sold (8,500 x $20) 170,000
gross margin $212,500
selling and administrative expenses 60,000
net income $152,500

Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced). Fifteen percent of total selling and administrative expenses are variable.
Compute net income under variable costing.

Reference no: EM13595927

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