Solution-What was the operating income for that year

What was the operating income for that year

Reference no: EM132549529

Sheffield Industries makes artificial Christmas trees. The unit costs for producing a tree are: Direct materials $27 Direct labor $13 Variable overhead $13 Fixed overhead $5 The company also incurs $2 per tree in variable selling and administrative costs and $3,100 in fixed marketing costs. At the beginning of the year the company had 830 trees in the beginning Finished Goods Inventory. The company produced 2,140 trees during the year. Sales totaled 1,400 trees at a price of $103 per tree.

Question (a) Based on absorption costing, what was the company's operating income for the year?

Question (b) Based on variable costing, what was the company's operating income for the year?

Question (c) Assume that in the following year the company produced 2,140 trees and sold 2,550. Based on absorption costing, what was the operating income for that year? Based on variable costing, what was the operating income for that year?

Reference no: EM132549529

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What was the operating income for that year

Reference no: EM132549529

Reference no: EM132549529

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