Chilly Chips,Inc

Essay

Chilly Chips,Inc.,a producer of ice cream,began operations this year.During this year,the company produced 160,000 cartons of ice cream and sold 145,000.At year-end,the company reported the following income statement using absorption costing:
Production costs per carton total $3.50,which consists of $2.30 in variable production costs and $1.20 in fixed production costs (based on the 160,000 units produced).Sixty percent of total selling and administrative expenses are variable.Compute net income under variable costing.