Lukin Corporation reports the following first year production cost information:
a. Compute production cost per unit under variable costing.
b. Compute production cost per unit under absorption costing.
c. Determine the net income using variable costing.
d. Determine the net income using absorption costing.
a. $41 DL + $15 DM + ($9,300,000/62,000) VOH = $206 per unit under variable costing
b. $206 + ($4,340,000/62,000) FOH = $276 per unit under absorption costing
c. NI = ($350 - $206)(59,000 units) - $4,340,000 - $1,000,000 = $3,156,000
d. NI = ($350 - $276)(59,000 units) - $1,000,000 = $3,366,000
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