Bellue Inc.manufactures a single product.Variable costing net operating income was $96,300 last year and its inventory decreased by 2,600 units.Fixed manufacturing overhead cost was $1 per unit for both units in beginning and in ending inventory.What was the absorption costing net operating income last year?
A) $2,600
B) $93,700
C) $96,300
D) $98,900

Question

Quizplus · Accepted Answer

Manufacturing overhead deferred in (released from) inventory = Fixed manufacturing overhead in ending inventory - Fixed manufacturing overhead in beginning inventory
= ($1 per unit × Units in ending inventory) - ($1 per unit × Units in beginning inventory)
= $1 per unit × (Units in ending inventory -Units in beginning inventory)
= $1 per unit × (-2,600) = -$2,600
 11ea7761_1815_3ec3_81a5_cf36bf350e47_TB2580_00