Ernsting Bottling Works manufactures glass bottles. January and February operations were identical in every way except for the planned production.
January had a production denominator of 35,000 units.
February had a production denominator of 36,000 units.
Fixed manufacturing costs totaled $126,000.
Sales for both months totaled 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.
Required:
Compute the operating income for both months using absorption costing.

Question

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The Answer of Ernsting Bottling Works manufactures glass bottles. January and February operations were identical in every way except for the planned production.
January had a production denominator of 35,000 units.
February had a production denominator of 36,000 units.
Fixed manufacturing costs totaled $126,000.
Sales for both months totaled 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.
Required:
Compute the operating income for both months using absorption costing.

Ernsting Bottling Works Manufactures Glass Bottles