Castaway Company Reports the Following First Year Production Cost Information

question 100

Essay

Castaway Company reports the following first year production cost information:
$$\begin{array} { | l | l | } \hline \text { Units produced } & 53,000 \text { units } \\\hline \text { Units sold } & 51,000 \text { units } \\\hline \text { Sales price } & \$ 150 \text { per unit } \\\hline \text { Direct labor } & \$ 8 \text { per unit } \\\hline \text { Direct materials } & \$ 4 \text { per unit } \\\hline \text { Variable overhead } & \$ 41 \text { per unit } \\\hline \text { Fixed overhead } & \$ 3,339,000 \text { in total } \\\hline \text { Operating expenses } & \$ 1,000,000 \text { in total } \\\hline\end{array}$$ a. Determine the net income using variable costing.
b. Determine the net income using absorption costing.

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Definitions:

Stimulation Source

An external or internal factor that induces a response or activity in biological, chemical, or physical systems.

Hypothalamus

A region of the brain that plays a crucial role in many important functions, including releasing hormones, regulating body temperature, and managing feelings of hunger and thirst.

Sensory Input

Information received by the body's sensory organs, which is then sent to the brain for processing.