The operating income calculated using variable costing and absorption costing amounted to $9100 and $11,200, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.
Locklear, Inc. reports the following information for the year ended December 31:
A) $11,850
B) $9750
C) $26,000
D) $31,200
B) $9750
Under absorption costing, fixed manufacturing overhead is treated as a product cost and is
expensed when the units sold are sold.
Therefore, total fixed manufacturing overhead cost expensed under absorption costing = 650 units × $15
per unit = $9750
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