Stamp Bottling Works manufactures glass bottles.January began with 15,000 units carried at $108,750.An additional 35,000 units were produced that month.February had production of 40,000 units.Fixed manufacturing costs totalled $119,000 in January and $132,000 in February.Sales for both months totalled 45,000 units with variable manufacturing costs of $4 per unit.Selling and administrative costs were $0.40 per unit variable and $60,000 fixed.The selling price was $10 per unit.Inventory moves on a first-in, first-out basis.Required:
Compute the operating income for both months using absorption costing.

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The Answer of Stamp Bottling Works manufactures glass bottles.January began with 15,000 units carried at $108,750.An additional 35,000 units were produced that month.February had production of 40,000 units.Fixed manufacturing costs totalled $119,000 in January and $132,000 in February.Sales for both months totalled 45,000 units with variable manufacturing costs of $4 per unit.Selling and administrative costs were $0.40 per unit variable and $60,000 fixed.The selling price was $10 per unit.Inventory moves on a first-in, first-out basis.Required:
Compute the operating income for both months using absorption costing.

Stamp Bottling Works Manufactures Glass Bottles