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Question

Caspian Company produced 20,000 units and sold 18,000 unitsdurig the current year. Under absorption costing, net income was$25,000. Fixed overhead was $190,000. Determine the net incomeunder variable costing.

Solution

xxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxFixed xxxxxxxx&#xxx;&#xxx;&#xxx;&#xxx; xxx,xxx.xxxx of xxxxx produced       xx,xxx.xxxxxxx xxxxxxxx per xxxx =190,000/20,000                 9.50xxxxxxx xxxxx = 20,000 - 18,000         x,xxx.xxxxxxx xxxxx cost xx closing xxxxx xxxxxxxxxxxxxx&#xxx;&#xxx;&#xxx;&#xxx;&#xxx;&#xxx; xx,xxx.xxThis xxxxx that xx xxxxxxxxxxxxxxxxx xx,xxx fixed xxxx was xxxxxxxx xxxx under xxxxxxxxxxxxxxx would xx xxxx xy 19,000xxxx net xxxxxx xxxxx xxxxxxxxxxxxxxx is xx,xxx -19,000         x,xxx.xx

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