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Question
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units, and sold 20,000 units, leaving 5,000 units in inventory at year-end. Income calculated under variable costing is determined to be $315,000. How much income is reported under absorption costing?A. $315,000
B. $265,000
C. $565,000
D. $365,000
Answer
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Direct labor X X
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Variable manufacturing overhead
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Direct materials
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Match the following
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