Find the net income using absorption method

Assignment Help Cost Accounting

Reference no: EM132755619

Question - Selected data for Babar Ltd of past year of operations are presented below:

Product X Production [in units] 4750

Sales [in units] 2800

Selling price $15.00

General activity [DL Hours] 5080

General activity [Machine hours] 1800

DLH RATE $21.00

Manufacturing cost Raw Materials [$] 3400

Direct Labour Hours 140

Manufacturing Overhead Variable overhead $2350

Fixed overhead $5600

Non manufacturing cost Variable selling $2618

Fixed selling cost $3560

Estimated total fixed cost for the company = $54,000. Company uses direct labour hours to assign cost in its absorption method of allocating cost to manufacturing overhead.

REQUIRED -

1. Calculate product cost of product X using variable cost.

2. Calculate product cost of product X using absorption cost.

3. Calculate variable cost of goods for the year.

4. Find the variable-costing net income.

5. Calculate cost of goods for the year using absorption method.

6. Find the net income using absorption method.

Reference no: EM132755619

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