Anchovy,Inc Production Costs Per Case Total $19,which Consists of $15

Essay

Anchovy,Inc.,a producer of frozen pizzas,began operations this year.During this year,the company produced 16,000 cases of pizza and sold 15,000.At year-end,the company reported the following income statement using absorption costing:
$$\begin{array} { l l } \text { Sales } ( 15,000 \times \$ 48 ) & \$ 720,000 \\\text { Cost of goods sold } ( 15,000 \times \$ 19 ) & \underline { 285,000} \\\text { Gross margin } & \$ 435,000 \\\text { Selling and administrative } & \underline { 79,000} \\\text { expenses } & \\\text { Net income } & \underline { \underline { \$ 356,000}}\end{array}$$
Production costs per case total $19,which consists of $15.50 in variable production costs and $3.50 in fixed production costs (based on the 16,000 units produced).Eight percent of total selling and administrative expenses are variable.Compute net income under variable costing.