Home Base,Inc Assume That Productions Costs Have Remained the Same Since the inventory

question 125

Essay

Home Base,Inc.reports the following production cost information:
$\begin{array}{ll}\text { Beginning inventory } & 10,000 \text { units } \\\text { Units produced } & 97,000 \text { units } \\\text { Units sold } & 92,000 \text { units } \\\text { Direct labor } & \$ 17 \text { per unit } \\\text { Direct materials } & \$ 34 \text { per unit } \\\text { Variable overhead } & \$ 2,522,000 \text { in total } \\\text { Fixed overhead } & \$ 1,940,000 \text { in total } \\\text { Operating costs } & \$ 2,000,000 \text { in total }\end{array}$

Assume that productions costs have remained the same since the previous period and all units are sold for $137.00 per unit.
a.Compute production cost per unit under variable costing.
b.Compute production cost per unit under absorption costing.
c.Determine net income using variable costing.
d.Determine net income using absorption costing.

---

Definitions:

Debts Paid

The act of fulfilling financial obligations by repaying borrowed money or settling outstanding loans.

Journal Entry

A record in the books of accounts that documents a financial transaction with a date, accounts affected, and amounts to be debited or credited.

Fair Value

An estimate of the market price of an asset or liability based on current conditions and available market information.

Journal Entry

A record of a financial transaction in the accounting system, showing debits and credits.