CookieClub Co

Essay

CookieClub Co. uses variable costing for managerial purposes and absorption costing for external reporting. These past two months, CCC has had an even number of sales at $100,000, at a price of $10 per unit. However, in an effort to reduce inventory levels, management decreased production from the regular 10,000 units to 7,500 units for last month only. CCC has fixed costs of $40,000 per month.
Assuming that sales continue to hold constant and production returns to normal levels, if absorption net income was $30,000 last month, what will it be this month? (Round per-unit costs to the nearest cent.)