Basics of income under absorption costing

Reference no: EM13140247

Jack Company sells its product for $11,000 per unit. Variable costs per unit are: manufacturing, $6,000, and selling and administrative, $125. Fixed costs are: $30,000 manufacturing overhead, and $40,000 selling and administrative. There was no beginning inventory at 1/1/09. Production was 20 units per year in 2009-2011. Sales was 20 units in 2009, 16 units in 2010, and 24 units in 2011. Income under absorption costing for 2010 is:

A) $8,000.

B) $14,000.

C) $16,000.

D) $22,000.

Reference no: EM13140247

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