Anchovy, Inc Production Costs Per Case Total $19, Which Consists of $15

question 115

Short Answer

Anchovy, Inc., a producer of frozen pizzas, began operations this year.During this year, the company produced 16,000 cases of pizza and sold 15,000.At year-end, the company reported the following income statement using absorption costing:
$\begin{array}{lr}\text { Sales } ( 15,000 \times\$ 48 ) & \$ 720,000\\\text { Cost of goods sold } ( 15,000 \times \$ 19 ) & \underline { 285,000 }\\\text { Gross margin } &\$ 435,000 \\\text { Selling and adrninistrative } & \underline { 79,000 }\\\text { expenses } &\\\text { Net incorne } & \underline {\$ 356,000 }\end{array}$ Production costs per case total $19, which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.

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Definitions:

Dominant Values

Refer to the prevailing or most important values that are shared among a group, culture, or individual, influencing behavior and decision-making.

Organizational Culture

encompasses the values, beliefs, and behaviors that contribute to the unique social and psychological environment of an organization.

Social Differentiation

The process by which societies or groups within them are separated into different categories or classes based on various factors like wealth, occupation, and social status.

Common Values

refer to shared beliefs or standards within a group or organization that influence behavior and decision-making processes.