What is the operating income when using absorption

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Reference no: EM131881879

Problem

Jean Peck's Furniture's manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $400 after negotiations. In the month of? January, it manufactures 3,500 tables and sells 2,600 tables. Actual fixed costs are the same as the amount fixed costs budgeted for the month.

The following information is provided for the month of? January:

Variable manufacturing costs	$160	per unit
Fixed manufacturing costs	$90,000	per month
Fixed Administrative expenses	$29,000	per month

At the end of the month Jean? Peck's Furniture's has an ending inventory of finished goods of 770 units. The company also incurs a sales commission of $14 per unit. What is the operating income when using absorption? costing?

Reference no: EM131881879

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