Asked by Hannah Baranda on Jun 28, 2024
Verified
What was the absorption costing net operating income this year?
A) $62,000
B) $74,000
C) $70,000
D) $66,000
Absorption Costing
A strategy in accounting practice that aggregates all manufacturing expenses, from direct materials and labor to variable and fixed overheads, into the determination of a product's cost.
- Comprehend the distinctions between absorption costing and variable costing, as well as their effects on operating income.
Verified Answer
SA
Syazwani AzyanJul 01, 2024
Final Answer :
B
Explanation : 
Reference: CHO7-Ref36
Helmers Corporation manufactures a single product.Variable costing net operating income last year was $86,000 and this year was $103,000.Last year, $32,000 in fixed manufacturing overhead costs were released from inventory under absorption costing.This year, $12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing.
Reference: CHO7-Ref36Helmers Corporation manufactures a single product.Variable costing net operating income last year was $86,000 and this year was $103,000.Last year, $32,000 in fixed manufacturing overhead costs were released from inventory under absorption costing.This year, $12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing.
Learning Objectives
- Comprehend the distinctions between absorption costing and variable costing, as well as their effects on operating income.
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