Preferred Products Has the Following Cost Information Available for 2009

question 102

Essay

Preferred Products has the following cost information available for 2009:
$\begin{array}{lr} \text { Direct materials} &\text {\( \$ 4.00 \) per unit}\\ \text { Direct labour} &\text {\( \$ 3.00 \) per unit}\\ \text { Variable manufacturing overhead } & \text {\( \$ 2.00 \) per unit}\\ \text { Variable selling and administrative costs } &\text {\( \$ 1.00 \) per unit}\\ \text { Fixed manufacturing overhead} &\text {\( \$ 25000 \)}\\ \text { Fixed selling and administrative costs } & \text {\( \$ 10000 \)}\\\end{array}$


During 2009,Preferred produced 5000 units out of which 4600 units were sold for $30 each.
Required:
A. Calculate Preferred's net income assuming the company uses variable costing.
B. Calculate Preferred's net income assuming the company uses absorption costing

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Definitions:

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a disdain for other groups.

Stereotype Threat

The risk of confirming negative stereotypes about one's social group, which can impair performance in a relevant area.

Social Dominance Orientation

A personality trait which predicts social and political attitudes, emphasizing hierarchy in the relationships among groups.

Right-Wing Authoritarianism

A personality and ideological framework characterized by adherence to conventional norms, submission to authorities, and hostility towards outgroups.