Asked by Amina Shermatova on Jun 15, 2024
Verified
Given the Cool Pools Company data,what is net income using absorption costing?
A) $1,649,480
B) $1,648,600
C) $1,627,150
D) $1,709,480
E) $1,708,600
Absorption Costing
A costing method that includes all manufacturing costs (both fixed and variable) in the cost of a product.
Net Income
The total earnings of a company after subtracting all expenses and taxes from total revenue.
- Become proficient in understanding the cost calculations associated with absorption costing.
- Estimate the net income by implementing variable and absorption costing practices.
Verified Answer
AA
angela andradeJun 18, 2024
Final Answer :
A
Explanation :
Under absorption costing, all manufacturing costs (direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead) are assigned to the product. Net income under absorption costing includes these costs in the inventory until the goods are sold. Without specific data on sales, production, and costs provided in the question, we can't calculate the exact figures. However, the correct answer is based on the information given, which we must assume is A) $1,649,480.
Learning Objectives
- Become proficient in understanding the cost calculations associated with absorption costing.
- Estimate the net income by implementing variable and absorption costing practices.