Compute the net income under absorption costing method

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Reference no: EM132769147

Max Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations:

Variable cost per unit:

Production:

Direct Materials 18

Direct Labor 7

Variable Mfg. Overhead 2

Variable selling & Admin 5

Fixed Costs per year:

Fixed Manufacturing overhead 160,000

Fixed Selling & Admin 110,000

During the year, the company produced 20,000 units and sold 16,000 units. The selling price of the company's product is 50 per unit.

Required:

Problem 1. Compute the cost per unit of product using absorption costing method

Problem 2. Compute the net income under absorption costing method

Problem 3. Compute for the cost of ending inventory under absorption costing method

Reference no: EM132769147

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