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Loring Company had the following data for the month:
Variable costs per unit:Direct Materials $4Direct Labor 3.20Variable Overhead 1Variable selling expense 0.40
Fixed Overhead is $4,000 per month; it is applied to production based on normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this months unit product cost. A total of 2100 units were sold during the moth at price of $14. Selling & Administrative expense for the month, all fixed totaled $3,600.
1. What is operating income under variable costing?2. What is the unit product cost under absorption costing?3.What is operating income under absorption costing?
What are the limitations of unit cost.
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