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Sproles Inc. manufactures a variety of products. Variable costing net operating income was $90,500 last year and its inventory decreased by 3,500 units. Fixed manufacturing overhead cost was $6 per unit. What was the absorption costing net operating income last year

Respuesta :

Answer:

$69,500

Explanation:

The computation of the absorption costing  net operating income is shown below:    

= Net operating income under variable costing - change in operating income

where,

Change in operating income is

= 3,500 units × $9

= $21,000

The change in inventory is 3,500 only

So, the absorption costing net operating income is

= $90,500 - $21,000

= $69,500

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