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

Comprehend how market mechanisms (increase or decrease in the number of firms) affect supply.

Recognize the reasons behind the upward slope of the supply curve.

Examine the influence of external events on market equilibrium (disease discoveries, technological breakthroughs).

Understand the factors that lead to shifts in supply curves.