ndiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations,110,016 units were produced, and 103,539 units were sold. Manufacturing costs and S&A expenses for the year were as following: Fixed Costs Variable Costs Raw materials -- $ 1.93 per unit produced Direct labour -- $ 1.46 per unit produced Factory overhead $ 97,087 $ 0.66 per unit produced Selling and administrative $ 66,735 $ 0.58 per unit sold Required: What was Indi's operating income for the year using absorption costing? Round your answer to the nearest dollar.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations,110,016 units were produced, and 103,539 units were sold.
| Fixed Costs | Variable Costs | |||||||
| Raw materials | -- | $ 1.93 | per unit produced | |||||
| Direct labour | -- | $ 1.46 | per unit produced | |||||
| Factory overhead | $ 97,087 | $ 0.66 | per unit produced | |||||
| Selling and administrative | $ 66,735 | $ 0.58 | per unit sold |
Required: What was Indi's operating income for the year using absorption costing? Round your answer to the nearest dollar.
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