Octagonal Company has the following information for the current year:Selling price$150 per unitVariable production costs$40 per unit producedVariable selling and admin. expenses$16 per unit soldFixed production costs$200,000Fixed selling and admin. expenses$140,000Units produced10,000 unitsUnits sold8,000 unitsThere were no beginning inventories.What is the net income for Octagonal using the absorption-costing method?a.$452,000b.$480,000c.$1,200,000d.$600,000

Solution... Fixed manufacturing overhead costs per unit = Total fixed overhead / units produced…

Answered: Octagonal Company has the following…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Octagonal Company has the following information for the current year:

Selling price	$150 per unit
Variable production costs	$40 per unit produced
Variable selling and admin. expenses	$16 per unit sold
Fixed production costs	$200,000
Fixed selling and admin. expenses	$140,000
Units produced	10,000 units
Units sold	8,000 units

There were no beginning inventories.

What is the net income for Octagonal using the absorption-costing method?

a.$452,000

b.$480,000

c.$1,200,000

d.$600,000

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