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Sagot :
Based on the incomes and the values of the finished goods, the income for the past three years would be:
- Year 1 = $131,410
- Year 2 = $126,450
- Year 3 = $133,340
Income in year 1
This can be found by the formula:
= Variable income + Ending finished cost - Beginning finished cost
= 124,000 + (1,900 units x 3.90 fixed overhead per unit) - 0
= $131,410
Income in year 2
= Variable income + Ending finished cost - Beginning finished cost
= 128,400 + (3.90 x 1,400) - (1,900x 3.90)
= $126,450
Income in year 3
= Variable income + Ending finished cost - Beginning finished cost
= 132,950 + (1,500 x 3.90) - ( 3.90 x 1,400)
= $133,340
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