Income for year 1 using absorption costing is:
A manufacturer reports the following information below for its first three years in
operation.
A) $76,000.
B) $82,400.
C) $88,800.
D) $106,600.
E) $111,000.
B) $82,400.
Income under absorption costing = Income under variable costing - FOH beginning inventory +
FOH ending inventory
Year 1:
$76,000 - (0 units × $8.00) + (800 units × $8.00) = $82,400
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