Explore BrainMass
Share

Hellman's Net Operating Income

This content was STOLEN from BrainMass.com - View the original, and get the solution, here!

Hellman Manufacturing has the following cost information available for 2012:

Direct materials $6.00 per unit
Direct labor $4.00 per unit
Variable manufacturing overhead $2.00 per unit
Variable selling and administrative costs $1.00 per unit
Fixed manufacturing overhead $80,000
Fixed selling and administrative costs $25,000

During 2012, Merriman produced 12,500 units out of which 11,000 units were sold for $60 each.

I need help in answering these questions:
A. Calculate Hellman's net operating income assuming the company uses variable costing.
B. Calculate Hellman's net operating income assuming the company uses absorption costing.

© BrainMass Inc. brainmass.com September 20, 2018, 4:18 pm ad1c9bdddf - https://brainmass.com/business/cost-volume-profit-analysis/hellmans-net-operating-income-564375

Solution Preview

Solution is also attached.
Steps :
1) First Find Cost of Goods Sold which is Opening Inventory+Manufacturing expenses-Closing Inventory
2) Find Gross Profit= Sales-COGS
3) Find Net Profit= Gross Profit- Other ...

Solution Summary

This solution helps in estimating Hellman's net operating income assuming the company uses variable costing.

$2.19