Williams & Jones Industries makes artificial Christmas trees. The unit costs for producing a tree are: Direct materials $23 Direct labor $17 Variable overhead $19 Fixed overhead $5 The company also incurs $2 per tree in variable selling and administrative costs and $4,100 in fixed marketing costs. At the beginning of the year, the company had 800 trees in the beginning Finished Goods Inventory. The company produced 2,080 trees during the year. Sales totaled 1,500 trees at a price of $101 per tree.
(a) Based on absorption costing, what was the company’s operating income for the year? Company’s operating income $enter the company’s operating income in dollars
(b) Based on variable costing, what was the company’s operating income for the year? Company’s operating income $enter the company’s operating income in dollars (
c) Assume that in the following year the company produced 2,080 trees and sold 2,400. Based on absorption costing, what was the operating income for that year? Based on variable costing, what was the operating income for that year?\