Anchovy,Inc.,a producer of frozen pizzas,began operations this year.During this year,the company produced 16,000 cases of pizza and sold 15,000.At year-end,the company reported the following income statement using absorption costing:
$$\begin{array} { l l }
\text { Sales } ( 15,000 \times \$ 48 ) & \$ 720,000 \
\text { Cost of goods sold } ( 15,000 \times \$ 19 ) & \underline { 285,000} \
\text { Gross margin } & \$ 435,000 \
\text { Selling and administrative } & \underline { 79,000} \
\text { expenses } & \
\text { Net income } & \underline { \underline { \$ 356,000}}
\end{array}$$
Production costs per case total $19,which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.

Question

Anchovy,Inc.,a producer of frozen pizzas,began operations this year.During this year,the company produced 16,000 cases of pizza and sold 15,000.At year-end,the company reported the following income statement using absorption costing:
 $$\begin{array} { l l } 
\text { Sales } ( 15,000 \times \$ 48 ) & \$ 720,000 \
\text { Cost of goods sold } ( 15,000 \times \$ 19 ) & \underline { 285,000} \
\text { Gross margin } & \$ 435,000 \
\text { Selling and administrative } & \underline { 79,000} \
\text { expenses } &  \
\text { Net income } & \underline { \underline { \$ 356,000}}
\end{array}$$ 
Production costs per case total $19,which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.

Quizplus · Accepted Answer

The Answer of Anchovy,Inc.,a producer of frozen pizzas,began operations this year.During this year,the company produced 16,000 cases of pizza and sold 15,000.At year-end,the company reported the following income statement using absorption costing:
 $$\begin{array} { l l } 
\text { Sales } ( 15,000 \times \$ 48 ) & \$ 720,000 \
\text { Cost of goods sold } ( 15,000 \times \$ 19 ) & \underline { 285,000} \
\text { Gross margin } & \$ 435,000 \
\text { Selling and administrative } & \underline { 79,000} \
\text { expenses } &  \
\text { Net income } & \underline { \underline { \$ 356,000}}
\end{array}$$ 
Production costs per case total $19,which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.

Anchovy,Inc Production Costs Per Case Total $19,which Consists of $15