Cape Cod Technolgy Inc

question 198

Essay

Cape Cod Technolgy Inc. manufactures heavy duty flash lights. January and February operations were identical in every way except for the planned production.
January had a production denominator of 80,000 units.
February had a production denominator of 60,000 units.
Fixed manufacturing costs totaled $200,000.
Sales for both months totaled 62,000 units with variable manufacturing costs of $4 per unit. Selling and administrative costs were $0.60 per unit variable and $51,000 of fixed. The selling price was $10 per unit.
Required:
Compute the operating income for both months using absorption costing.

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Definitions:

Feature Analysis

A process in cognitive psychology that involves breaking down visual stimuli into individual components or features for recognition and interpretation.

Top-to-bottom Processing

Cognitive processing that starts with the formulation of the perceptual hypothesis about a stimulus and works downwards to finer detail.

Reversible Figures

Visual illusions or images that can be perceived in more than one way, revealing cognitive processes involved in visual perception.

Figure and Ground

A principle in gestalt psychology that refers to the tendency of the perceptual system to simplify a scene into the main object that we focus on (figure) and everything else that forms the background (ground).