The HF Corporation manufactures and sells toy gyroscopes.The following data is related to sales and production of the toy gyroscopes for last year.

Using absorption costing,what is gross profit for last month?

Question

The HF Corporation manufactures and sells toy gyroscopes.The following data is related to sales and production of the toy gyroscopes for last year.

Using absorption costing,what is gross profit for last month?

Quizplus · Accepted Answer

A)
Fixed MOH $75,000 divided by units produced 500,000 = $0.15 Fixed MOH
Add Variable manufacturing cost 1.83
=Total Manufacturing cost 1.98
× 150,000 sales
= $297,000 Cost of goods sold
So: Sales $8 × 150,000 = $1,200,000
Less Cost of Goods Sold 297,000
Equals Gross Profit $903,000

The HF Corporation Manufactures and Sells Toy Gyroscopes