Tercero Company sold 42,000 units in 2025. The manager did not find any variable cost variances and actual production equaled budgeted production of 40,000 units. Beginning inventory for the year was 3,500 units and last period's inventory carried the same cost per unit as this period's production. The company's income statement used for internal reporting shows the following: The CEO of Tercero wants to determine operating income under absorption costing. Prepare an absorption costing income statement for 2025.

Question

Tercero Company sold 42,000 units in 2025. The manager did not find any variable cost variances and actual production equaled budgeted production of 40,000 units. Beginning inventory for the year was 3,500 units and last period's inventory carried the same cost per unit as this period's production. The company's income statement used for internal reporting shows the following:  The CEO of Tercero wants to determine operating income under absorption costing. Prepare an absorption costing income statement for 2025.

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The Answer of Tercero Company sold 42,000 units in 2025. The manager did not find any variable cost variances and actual production equaled budgeted production of 40,000 units. Beginning inventory for the year was 3,500 units and last period's inventory carried the same cost per unit as this period's production. The company's income statement used for internal reporting shows the following:  The CEO of Tercero wants to determine operating income under absorption costing. Prepare an absorption costing income statement for 2025.

Tercero Company Sold 42,000 Units in 2025